Oral Answers to Questions

HOME DEPARTMENT

The Secretary of State was asked—

Violent Crime

Michael Penning: What measures he is taking to tackle violent crime.

Charles Clarke: Violent crime as measured under the British crime survey has fallen by 34 per cent. since 1997, but it is still too high, so the Government are undertaking a full range of work that will continue to reduce it. They include measures in the Violent Crime Reduction Bill, which is currently before Parliament. Those measures will give police and local communities the powers that they need to tackle guns, knives and alcohol-related violence.

Michael Penning: The Home Secretary will not have cheered up any of my constituents with that short and complacent comment. Drink abuse has made my town centre a no-go area. My excellent police force is doing its level best to control the situation, but extending licensing hours and abolishing the Hertfordshire constabulary is not the answer. Can the Home Secretary come up with something better?

Charles Clarke: There is no complacency at all. Our measures, including those in the Violent Crime Reduction Bill, are designed to strengthen our capacity to deal with violent crime. As for the reorganisation of the constabulary, it is a means of conveying more resources to the front line, where they are really needed.

Ashok Kumar: Crime in Middlesbrough is down by 20 per cent., thanks to the great leadership of chief constable Sean Price and the Cleveland police. Like the hon. Member for Hemel Hempstead (Mike Penning), however, I find that problems in the town centre are serious at times and take up a large amount of resources. Has my right hon. Friend any words of encouragement? Can he give Middlesbrough any financial support so that we can tackle the difficult issue of violent crime, which is definitely on the increase?

Charles Clarke: I can certainly give words of encouragement. Announcements on police funding will be made later today. Moreover, the Violent Crime Reduction Bill contains measures requiring organisations in alcohol disorder zones which are putting pressure on police resources to contribute to the cost of resolving the problems. That is a new departure, and one that is very welcome.

Owen Paterson: Tackling violent crime is a major concern in North Shropshire. Is the Home Secretary aware that 88 per cent. of the first 3,000 people to reply to the survey in West Mercia wanted the authority to be strengthened as a strategic authority? Would it not be wise for him to talk to the chief constable directly? May I bring the chief constable to see him to discuss violent crime, and to explain that an enhanced West Mercia—not the ludicrous crashing through of a regional authority that only 12 per cent. of people want—represents the way ahead?

Charles Clarke: My ministerial colleagues and I have frequently discussed those matters with chief constables and with chairs of police authorities, including the chair and chief constable of West Mercia. The hon. Gentleman is right to draw attention to concern in West Mercia about proposals for a merger with other forces, which has been expressed to me directly. I intend to wait for the conclusions reached by the police following the consultation before deciding how to proceed.

Judy Mallaber: Millions of women experience crimes of violence. They are beaten, raped, mutilated, murdered and trafficked. I hope that my right hon. Friend will support the "Stop Violence Against Women" campaign. Will he also promote the extension of sexual assault referral centres such as Millfield House, the result of an initiative launched by Derbyshire constabulary and Derbyshire Rape Crisis? It has provided 230 counselling sessions and 100 medical examinations following sexual assaults. Does my right hon. Friend think that such centres may help us to improve on the 5.3 per cent. rate of convictions following prosecutions for rape?

Charles Clarke: I strongly support the campaign. I also support the centres, whose number we have recently doubled.
	My hon. Friend's fundamental point is about giving every individual, particularly women, confidence to deal effectively with these appalling crimes, properly supported by the police. That is the relationship that we must develop, which is why I take amiss some of the ill-informed political sloganising that surrounds some kinds of violent crime. We are trying to ensure that those crimes are reported and dealt with, through the means described by my hon. Friend.

Vincent Cable: Should action on violent crime not include proper support for victims? Can the Home Secretary explain why victims of violent crime are having to wait more than four years for payments from the criminal injuries compensation scheme in Glasgow?

Charles Clarke: Certainly, action on violent crime should include proper support. I agree that there are a number of unacceptable delays in payments from the scheme. The Government intend to publish later this week detailed proposals for consultation on how we might improve the agency's performance and focus resources more effectively.

Dennis Skinner: Is the Home Secretary aware that in Derbyshire—quite remarkably—crime has fallen in nearly every category for several years running since Labour came to power? The reason is the extra money that has been provided. Would it not be even better, especially in areas where the drug culture is prominent, if Members of Parliament—especially those over there on the Conservative Benches—stopped giving examples of people taking drugs, and others shoving that white stuff up their noses?

Charles Clarke: My hon. Friend makes his point extremely effectively and it is important to emphasise what he says. Crime figures have been coming down, including, I am glad to say, those on crime relating to drug abuse—we are reducing levels of drug crime as well.

David Davis: rose—

Hon. Members: Hear, hear.

David Davis: It is good to be back.
	The truth is that violent crime has nearly doubled under this Government.
	"Tough on crime, tough on the causes of crime"
	is the Prime Minister's most famous phrase. Alcohol is a major cause of violent crime, but the Government's answer to too much drink, too much of the time, is more drink, all the time. Which of the following quotations does the Home Secretary agree with: that the new 24-hour drinks law is
	"a serious piece of legislation intended to . . . curb crime",
	or that, as a result of that legislation,
	"Yes, you may see a rise in violent alcohol related crime"?
	Both were said by the Secretary of State for Culture, Media and Sport.

Charles Clarke: I am not sure whether this is the right hon. Gentleman's final Home Office questions, but whether he is on his way up or out, or still here after Christmas, I pay tribute to his commitment to genuine debate in this area—in the hope of gaining him a few more votes in the leadership contest.
	First, the right hon. Gentleman is simply wrong when he says that violent crime has doubled. All the facts indicate absolutely clearly that violent crime has reduced. Secondly, is the Licensing Act 2003 serious legislation? It certainly is, as it is designed to encourage responsible drinking and to tackle the kind of activities that we have seen over many years. Thirdly, is it possible that our alcohol reduction campaign pre-Christmas will lead to an increase in recorded alcohol-related crime? It is possible, as the police arrest more people, which is what they are out trying to do.

David Davis: I thank the Home Secretary for his kind words, but it is after the deadline for voting. As for his comments on the level of violent crime, I suspect that it will not be the last time today that the Government will rest their case on fiddled figures.
	Let us come back to the other major cause of violent crime, which is drugs. Under this Government, both the supply and the use of hard drugs have spiralled out of control. As a result, a report last week from the Joseph Rowntree Foundation showed that professional drug dealers' average income was £7,500 a week—equivalent to a legal income of over £500,000 a year. Is it any wonder that in defence of such lucrative territories we see spiralling violent crime, including knife crime, gun crime, wounding, murders, even killing of innocent bystanders? That is a direct result of the Government's lax drugs policy. Does the Home Secretary believe that his current anti-drugs policy is helping to reduce levels of violent crime and, if so, how?

Charles Clarke: When the right hon. Gentleman refers to fiddled figures, he should remember that the British crime survey, which he has criticised, was established by a Government of whom he was a part to establish an objective assessment of crime. He should look more carefully at his own record. During the general election, for example, he and his party produced fiddled figures on poster sites throughout the country to such an extent that police protested about what was going on. As for drugs policy, I agree that drugs remain a major source of criminality at all levels and need to be tackled, both at the level of both the organised crime itself and the supply into this country, and at the level of the demand for the drugs. Our drugs policy does that and has led to significant improvements in recent years.

Police Force Mergers

Laurence Robertson: If he will make a statement on his proposals to merge police forces in the south-west of England.

Hazel Blears: The consultation phase is currently under way and no decisions have yet been made. Police forces and authorities in the south-west as well as other regions will be expected to present their preferred options by 23 December. Thereafter, careful assessment will be carried out on the viability of those options for proceeding to implementation. Throughout the whole process, forces and authorities should be engaging fully with their local communities and stakeholders, and feeding in their views.

Laurence Robertson: I thank the Minister for that answer, but I suspect that the whole House believes that decisions have already been taken on this issue. I am glad that she is going to listen to the consultation, because in Gloucestershire the chief constable, the police authority, the county council, each of the six local authorities and thousands of people across the area totally oppose the proposed mergers. Gloucestershire has a very good record in tackling level 2 crime, and we should remember the infamous West case and the biggest legal aid fraud case in the country. Why does the Minister feel that all those people are wrong and that she is right?

Hazel Blears: I can certainly confirm that decisions have not been taken, which is why we have said to police forces and authorities that we want them to do the work locally and to produce the options and business cases that will enable us to provide improved policing for local communities. The hon. Gentleman and his party have to face up to the reality. According to the best possible advice from Her Majesty's inspectorate of constabulary, the current 43-force structure is no longer fit for purpose in the 21st century, and we have to do something to ensure that we can meet the challenges that exist. We have not closed off any options, but there will have to be some change.

Chris Bryant: Somerset and Avon police have worked very closely with South Wales police on Operation Tarion, which is trying to tackle the terrible trade in drugs in the south Wales valleys. As one who supports the combining of Welsh police forces into a single Wales police force, may I ask the Minister whether she will ensure that, none the less, the relationships that have been built up with forces across the border, especially on drugs policy, will continue?

Hazel Blears: I am delighted that my hon. Friend is engaging in this debate in a mature and constructive fashion. This is a serious point, because all of us will be subject to very local views. People will naturally want to cleave to their current organisation, but my hon. Friend is prepared to look at change in order to improve policing. I am delighted to give him the reassurance that he seeks. The existing relationships between forces that have been working across borders to tackle serious and organised crime will not only continue but will need to be strengthened. HMIC's advice is that such crime is likely to get worse, not better, and that the pressures on level 2 services will increase as criminals become more sophisticated. So those excellent relationships in tackling drug crime across the south-west will need to be strengthened.

Tobias Ellwood: I hope that the Minister is aware of Bournemouth's strong relationship with Hampshire; indeed, it used to be part of Hampshire. Why, therefore, are Dorset and Hampshire being prevented from considering a merger in the context of police restructuring?

Hazel Blears: In originally setting out the criteria that we wanted police forces and authorities to consider, we said that we wanted options that did not involve crossing Government Office boundaries or dividing existing forces, and we did so for a very good reason. Improving policing services does not depend simply on the police working on their own; it also depends on the rest of the criminal justice system, the Crown Prosecution Service, the various community safety funding streams and local government. We said that we would not rule out such options completely, but that there would have to be a remarkably compelling case for going across Government Office boundaries or for splitting police forces. Some may well come forward with such options, but at the moment we see no sign of the compelling case that would need to be made in order to outweigh the practical considerations contained in the criteria.

Kerry McCarthy: I very much welcome the announced merging of police forces across the south-west, and I hope that that will help to deal with the very serious problems of crack cocaine dealing and Bristol's acting as a drug supermarket for the south-west. However, there is also the increasing problem of the misuse of khat among the Somali community in the south-west. When will the Advisory Council on the Misuse of Drugs' report on the criminalising of khat be produced?

Hazel Blears: I am grateful to my hon. Friend for the constructive way in which she is approaching the question of merging forces. She is right: we need to combine our capacity, so that we have the resilience to cope with very serious issues such as drugs, money laundering, serious and organised crime, terrorism and civil emergencies. I can also give her the assurance that the issue she has raised about khat is under active consideration. I understand that the report is with the advisory council at the moment and we will consider the issue as soon as we can. It is important to bear down on all kinds of drug activity that can lead to increased criminality in our communities.

Mark Oaten: Is the Minister aware that Gloucester, Cleveland and Northamptonshire police forces have estimated that this restructuring will cost them each £50 million? Is the Minister in a position to say what the overall national costs will be? They could run to billions of pounds. Will it be left to council tax payers to fund it or will the local government finance statement later today reveal that the Government will pick up the bill? Surely the Government should listen to the public, abandon the restructuring, and provide more front-line police, not an unnecessary merger programme.

Hazel Blears: Issues of finance and governance will be of prime importance, especially to our police authorities. Indeed, when I went to the Association of Police Authorities conference last week in Belfast, those issues were rightly raised. We envisage that savings will be made by bringing forces together, but there are issues about up-front costs. We have set up a tripartite finance working group, with representatives of the association, the forces and the Home Office. We can look at a range of measures to obtain finance. It may be that forces that will come together already have improvement programmes costed into their forward business plans. When we consider the business plans on 23 December, we will take a keen look at the financial provisions. It may well be possible to do some prudential borrowing around those issues and it may be possible to capitalise some of the costs. I genuinely believe that bringing forces together will give us some long-term economies of scale, but this is not a cost-cutting exercise—

Mr. Speaker: Order. Perhaps the Minister could write to the hon. Gentleman.

Michael Clapham: rose—

Mr. Speaker: Order. I may need to brush up my English geography, but as far as I am aware, Yorkshire is not in the south-west. The hon. Gentleman may ask his question if he can keep it to the south-west.

Michael Clapham: The reorganisation of the police forces in the south-west of England is obviously an important measure, as it is elsewhere in the UK. In addition to considering the reorganisation, will my right hon. Friend look closely at the way in which action is co-ordinated between and within police forces including, for example, the chief constable's policing plan, the police committee and the safer and stronger communities priority? It is important that we all share the same agenda, because the public can be confused by the disintegration between the various committees that put the police argument forward. Will she ensure that that co-ordination takes place?

Hazel Blears: Yes, I shall try to ensure that there is co-ordination in the south-west, the south-east, Yorkshire and the north-east. My hon. Friend makes an important point. Bringing forces together at a strategic level should help us to strengthen the neighbourhood policing that everybody wants to see in their communities. The pressures to take our neighbourhood police officers away to deal with serious and organised crime will grow, and if we can bring forces together, we can ensure that we will be able to sustain our commitment to every area having a visible and accessible police team. I know that my hon. Friend plays a pivotal role in his local crime and disorder reduction partnership and how much he will want to protect neighbourhood policing.

Edward Garnier: The Minister has had the advantage of listening to the chairmen and chairwomen of the police authorities of England and Wales at the Belfast conference last week. Can she identify a single one of them who supported the Government's restructuring policy?

Hazel Blears: Yes, as well as attending the general conference session, I had a series of positive, constructive and detailed discussions with chairs and chief executives of police authorities. The hon. and learned Gentleman would feel that I was being somewhat premature if I were to detail the nature of those discussions at this point, but many of the police authorities—unlike Opposition Members—recognise the need to change if we are to be able to deal with the serious issues of counter-terrorism, serious and organised crime and civil emergencies. I point out to Opposition Members that if they think they live in a world where we can continue with the current configuration of police forces and not provide better services to the people of this country, they are living in a fantasy world. I suggest to all of them that they talk to their police authorities and look at the real and serious issues that many of them face.

Probation Service

Jim Cousins: What plans he has for the probation service.

Fiona Mactaggart: A consultation paper setting out the Government's proposals to restructure the probation service was published on 20 October. We intend to legislate to implement those proposals, which will help to drive up performance and contribute to the reduction of reoffending.

Jim Cousins: I am grateful for that reply. The Government have rightly set the probation service some tough targets, which have been met. Indeed, new services have been developed to deal with numeracy, literacy and the mental health and well-being of the people who use the service. May I, therefore, urge my hon. Friend not to break up the service, and not to hold out the threat of privatisation with the prospect of loss of identity and a complete free for all about who the employers might be in the future?

Fiona Mactaggart: I share my hon. Friend's enthusiasm for the success to date of the national probation service, which has achieved a lot in helping us to reduce reoffending. I share, too, his congratulations to the service, but it knows, as a service that has gone through change and stepped up to the challenges of change, that we can do better, and our proposals to create contestability and to involve a range of providers for probation services will enable us to do that more effectively in future.

Elfyn Llwyd: What evidence is there that the introduction of a mixed economy in the delivery of probation services will in any way enhance public protection or reduce reoffending?

Fiona Mactaggart: The experience of contestability in the Prison Service has shown us that we can improve provision in terms of not only resources but also, for example, the decency agenda. As Her Majesty's inspectors have pointed out, the private Prison Service has done a lot to improve our prison services.

John Grogan: In recent times, the Home Office has proposed market testing and possible privatisation not just for the probation service but also for the Forensic Science Service and various young offender institutions. In a mature and constructive way, may I ask my hon. Friend whether any aspect of the management and apprehension of offenders has such a strong public service element that it would be inappropriate for market testing and possible privatisation?

Fiona Mactaggart: I believe that the state has to take responsibility for those services and that we need to ensure that they are delivered in a way that reflects a public service ethos. That does not require every person who delivers every part of them to be employed by a public authority.

Islamist Extremism

Michael Gove: If he will make a statement on measures he is taking to combat Islamist extremism.

Charles Clarke: Combating extremism is a job for the whole Government working in partnership with all faith communities. Over the summer, Ministers from all Departments met representatives of faith communities throughout the country to discuss the best means of proceeding.
	During the summer, we established with the Muslim community a series of working groups to support communities' ability to challenge extremism themselves. Those "preventing extremism together" groups have developed a broad range of practical proposals, and many of them will be taken forward by community representatives, with Home Office support, in the coming months.

Michael Gove: I am grateful to the Secretary of State for his reply, but he will be aware that among those who have been advising the Government on combating extremism are Mr. Ahmad Thomson, Mr. Khurshid Ahmad and Mr. Mockbul Ali. They have asserted respectively that Hitler was financed by Zionist financiers and that Muslims are obliged to want an Islamic state. One of them, Mr. Mukbar Ali, described the Muslim Brotherhood, the godfather organisation of Hamas, as reformist, progressive and liberal. Does the Home Secretary believe that people who hold those views are the right individuals to help us build the inclusive, tolerant, multi-faith society that everyone on the Conservative Benches wants to see?

Charles Clarke: I do not accept the descriptions that the hon. Gentleman has given, but I shall certainly look at them carefully. This is a major issue for the way in which we engage with the mainstream Muslim community following the events of July, and it is very important that we have the widest possible range of engagement. That does not mean tolerating and accepting views of the type that he describes—I abhor them just as strongly as he does—but it does mean that we must have a very full debate, particularly relating to young people from the Muslim community, to ensure that we can contest the extremism in the most effective way.

Gisela Stuart: Does the Home Secretary accept that dealing with extremists is not just a problem to be resolved in the United Kingdom? When the Foreign Affairs Committee goes to countries ranging from Morocco and Libya to Saudi Arabia, one of the things that they are most concerned about is access to websites and CDs. Will he therefore work with his colleagues in other countries to deal with those websites and combat those ideas?

Charles Clarke: I very strongly agree with my hon. Friend. She may be interested to know that, just last Friday, the European Union Council of Justice and Home Affairs Ministers concluded a set of proposals on contesting radicalisation recruitment for precisely the reasons that she gives. When I led an EU delegation to Washington, we had very specific discussions with the Americans on exactly the same basis. She is entirely correct.

Julian Brazier: In the summer after 7/7, both the Prime Minister and the Home Secretary made it clear that central to policy would be to achieve the expulsion from this country of a small number of extremist imams and others who are doing so much to stir up hatred—a statement that was welcomed by quite a number of moderate Muslim figures. Can the Home Secretary confirm to the House that no one has yet been expelled under that heading? Will he tell the House how many proceedings against such individuals have been started?

Charles Clarke: I shall not set out the details of the second part of the hon. Gentleman's question, which he asks publicly in the House today, but I will say that we have successfully taken action against individuals who have been settled in this country. However, I acknowledge—this is the truth in his point—that it is a very difficult process to deport people from this country to countries where they may not be able to live or where it is thought that they cannot live safely. That is a central issue for us in that approach.

Ann Cryer: Does my right hon. Friend agree that the persons described by the hon. Member for Surrey Heath (Michael Gove) in no way represent the majority of our constituents who are Muslims? In fact, they would be disowned by them. They do not represent them in any way.

Charles Clarke: My hon. Friend is 100 per cent. correct. That is certainly the case. What is most important in all this is to work with the mainstream Muslim community to isolate extremism, and that is exactly what we are seeking to do.

Patrick Mercer: In October, the Government's strategy to counter Islamist extremism was reviewed by the Prime Minister's delivery unit, which found that the strategy
	"is not connected or coherent",
	that no one seems to be in charge and that
	"we measure meetings and reports, not real-world impact."
	How will the Home Secretary make sure that that strategy does not fail completely?

Charles Clarke: The hon. Gentleman refers to leaks, but he is leaking the wrong criticism that has been made. Leaving that aside for a moment, the fact is that we have a highly structured and effective campaign to deal with the issue. We are focused not only on dealing with extremism in the way that was suggested by the hon. Member for Surrey Heath (Michael Gove) in asking about the relations with the whole Muslim community and the intensification of our democracy, which is centrally important, but on dealing with the explicit terrorist and extremist threat, which is what the report to which he refers was about. We have made a number of significant attempts to achieve a far more effective situation.

Antisocial Behaviour (Wirral)

Ben Chapman: If he will make a statement on levels of antisocial behaviour in Wirral, South.

Paul Goggins: For the current year, Wirral crime and disorder reduction partnership was allocated nearly £400,000 to tackle crime and antisocial behaviour. That is helping local agencies to bear down on this type of unacceptable behaviour through a range of preventatives and other measures.

Ben Chapman: Is my hon. Friend content that, in the funding streams, resources and allocation of priorities used by the police, sufficient focus is given to constituencies, such as mine, with large suburban and semi-rural areas and countryside? Does he agree that incidents, such as that when Bebington British Legion was invaded by 10 youths who intimidated and abused those inside, might be best avoided if the already scarce police resources were not diverted to urban areas? Will he assure me that an appropriate balance is drawn between semi-rural and suburban areas, which have their own problems with antisocial behaviour, and downtown areas, which have a different set of problems?

Paul Goggins: It is important to strike the balance to which my hon. Friend refers. He never fails to take the opportunity to raise the issue in both Parliament and his constituency—rightly so—and to push the kind of partnerships that can make a difference. Wirral is an action area. It has an antisocial behaviour co-ordinator, whose job it is to ensure that each and every part of my hon. Friend's constituency and the rest of the Wirral gets the appropriate response whenever antisocial behaviour rears its ugly head.

Prison Population

Julian Lewis: If he will make a statement on the size of the prison population.

Philip Davies: If he will make a statement on the size of the prison population.

Fiona Mactaggart: The prison population on Friday 2 December was 77,262. It is the duty of the Government to provide places for all whom the courts send to prison. Our aim is to work with offenders while they are in prison so as to remove the danger they offer to the public and to reduce their propensity to reoffend.

Julian Lewis: Does the Minister accept that the early release schemes that have been applied in the past have done nothing to reduce the prison population, because otherwise why are our prisons bursting at the seams? Will she undertake not to try to resolve that problem by further reducing the prison sentences served, which so discredits the sentences nominally imposed that our newspapers are full of the complaints of the families of PCs and head teachers who have been murdered that the murderers are being let out far too early?

Fiona Mactaggart: Since the inception of the scheme to which I think the hon. Gentleman largely refers, more than 119,000 prisoners have been released on home detention curfews. Something like five or six additional prisons would have been required had it not been possible to release those people in such a way. While I am second to none in offering my condolences to people who have suffered tragedies due to released prisoners who have breached the conditions of their curfew, it is worth pointing out that the reoffending rate among those on home detention curfews in the period following their curfew—and, indeed, while they are on curfew—is substantially less than that of other offenders. Although the scheme is obviously not risk free, that suggests that the risk is being managed relatively well.

Philip Davies: Due to the lack of available prison spaces, more than 6,700 crimes have been committed by people who have been let out of prison on an electronic tag. Some 1,200 people who were let out of prison early on parole since 1997 went on to commit a further crime before the end of their sentence. Is it not time to make more prison places available, stop electronic tagging and make prisoners serve their sentences in full to restore some credibility and confidence to the criminal justice system and for the safety of all our constituents?

Fiona Mactaggart: The Conservative party is making much of this kind of flouncing, as it did during the general election, when it promised 20,000 extra prison places, but only something like a fifth of the money to pay for them, which they claimed to have identified from administrative savings. The synthetic passion that Conservative Members are demonstrating is frankly not up to snuff. We need to reduce offending and that is what this party has done. We need to ensure that prisons are used for violent, dangerous and seriously persistent offenders and that is precisely what we are doing. We need to ensure that people serve sentences effectively, which is one of the reasons why immediate custody rates have gone up from 6 to 16 per cent. in magistrates courts and from 49 to 60 per cent. in Crown courts. It is also why the average length of sentence served has gone up from 20 to 27 months. I suggest that the hon. Gentleman checks his facts before he pounces.

Neil Gerrard: Does my hon. Friend accept that one contributing factor to overcrowding in prisons is the thousands of people who are in on remand, some of whom end up being acquitted and quite a lot of whom end up with a sentence that is shorter than the time they served on remand? Will she consider the significant variations between different police and court areas in the numbers of people who are remanded, as opposed to being on bail, before trial?

Fiona Mactaggart: My hon. Friend is right. The biggest proportionate increase in the prison population is the remand population, which has increased by 10 per cent. over the past year. It is also clear that different areas have different practices in relation to remand. That is one reason why we need to ensure that better bail information is available to courts so that they do not remand unnecessarily. Apart from anything else, prisoners on remand are not able to participate in some of the effective work that takes place with sentenced prisoners. We need to ensure that we bear down on the unnecessary use of remand, although we need to use it if the safety of the public requires it.

Rob Marris: One thing that would help to cut the prison population would be if we did a better job on rehabilitation. Can my hon. Friend assure me that more resources will be put into rehabilitation, in particular education in prisons and for young people on the secure estate, which has been sorely neglected in recent years, although it has started to pick up?

Fiona Mactaggart: My hon. Friend is right. Our additional investment in education means that one in 10 basic literacy and numeracy qualifications is obtained by adults in prison. We are putting particular efforts into working with young offenders to help them to reduce their reoffending. There has been reassuring progress in some of the reconviction rates for young offenders. We need to ensure that we put in the effort on the programmes, education and, indeed, the other things that are associated with reducing reoffending, such as having a home and a job. All those things help people to go straight.

Susan Kramer: Is the Minister aware that when rehabilitation becomes the main way of reducing the number of people in prison, resettlement prisons, such as Latchmere House in my constituency, which has only 207 places, are essentially the poor relatives of the Prison Service? However, Latchmere House has managed to achieve a reoffending rate of only 25 per cent., precisely because it reintegrates people with their families, gets them into jobs and allies them with Alcoholics Anonymous or Narcotics Anonymous in their community. Will she reconsider putting more finances into such prisons, which can achieve our goal, rather than looking at them as something to satisfy a punitive instinct?

Fiona Mactaggart: The hon. Lady is right. Working with prisons that resettle people in a local community is important. We should welcome and develop the work of institutions such as Latchmere House. It is inevitable that they are less expensive to run than the high security estate. I am not going to promise to rebalance spending so that they get substantial amounts, but our direction of travel, in terms of the prison estate, is to look more carefully at the way in which prisons work with their local community to rehabilitate and resettle reoffenders, and with their local employers and others to ensure that reoffenders have jobs and homes, that they are healthy and that their alcoholism and drug use are effectively tackled, so that they contribute to society rather than stealing from it, as they have done in the past.

Ian Lucas: Does my hon. Friend accept that in appropriate cases involving non-violent offenders, community punishments are much more successful than imposing prison terms in preventing reoffending? Does she also accept that we have an awful long way to go in convincing the public of that truth? What is her Department doing to pursue that task?

Fiona Mactaggart: My hon. Friend is right. The Criminal Justice Act 2003 made available to sentencers a robust series of community punishments, which they can target on the individual offender. Only last month, we launched a community payback initiative, which is designed to ensure that offenders make restitution for some of the wrong they have done to the community. I hope that that initiative will publicise how an effective, well-supervised community punishment can do more to rehabilitate offenders than lurking in prison, largely on remand, does for some offenders who end up there. Prison should be used for truly dangerous or violent offenders or for serious repeat offenders.

Cheryl Gillan: With 60 per cent. of our prisons dangerously overcrowded according to Home Office figures, large numbers of convicted prisoners being kept in police stations in London, record reoffending rates and record levels of suicide among prisoners, the resignation of the prisons chief executive, and now prisoners able to take mobile phone pictures inside our top security establishment at Belmarsh, would the Minister say that Labour's prisons policy is working?

Fiona Mactaggart: I advised the hon. Lady's Friends to check their facts before they made allegations. No prison in the UK is dangerously overcrowded. The chief executive has not resigned: he has moved on to another job, and her comment is a complete mischaracterisation of the action of someone who has served the public so well for so long and who is taking up a new challenge. There is neither a record reoffending rate, nor a record rate of self-inflicted deaths; in fact, the numbers have decreased in both cases. As for her claim that our police cells are full, since the middle of November only three people have been held overnight in police cells. She should check her facts.

Licensing Laws

James Duddridge: What resources he is providing to local and police authorities to assist them in dealing with the liberalised licensing laws.

Andy Burnham: Government expenditure on policing increased by more than 39 per cent., or £3 billion, between 2000–01 and 2005–06. The powers contained in the Licensing Act 2003 will assist police and trading standards authorities to tackle alcohol-fuelled disorder. In addition, we have recently announced funding of £2.5 million to boost a range of operations to crack down on alcohol-related disorder.

James Duddridge: I think that that was a no. Sir Ian Blair, the Metropolitan Police Commissioner, has called for the big pub chains to make a contribution to pay for extra policing. Does the Minister believe that there should be extra policing, and who will pay?

Andy Burnham: I do not think that the hon. Gentleman was listening, because I said that an extra £2.5 million has been allocated. I do not know whether he was one of those who predicted the end of the world when the new Act came into force, but in my view its long-awaited reforms allow the vast majority of law-abiding drinkers to enjoy a quiet pint when they want, and give the police powers to clamp down on unruly establishments. That is a fair balance, which is good for the whole country.

Bob Blizzard: Police and trading standards officers in Lowestoft are making use of their new powers to crack down on licensed premises that sell alcohol to under-18s. Sadly, however, seven of the 14 establishments visited during a recent effort were observed selling alcohol to under-18s. Will my hon. Friend join me in sending a message, not only to those establishments but to all of them, that selling alcohol to under-age people is antisocial and morally reprehensible and can lead to a fine of £5,000?

Andy Burnham: I entirely agree with my hon. Friend and I congratulate those who have been doing that work in his area. Where work has been done through the alcohol misuse enforcement campaign to clamp down on alcohol-related crime, the result has been a significant reduction in such crime. However, he is right to say that there should be no tolerance of organisations that repeatedly sell to under-age drinkers. I support the full use of the powers that we have given police forces and others to clamp down on the sort of morally unacceptable behaviour to which he has drawn our attention.

John Butterfill: Is the hon. Gentleman aware that my police force is already in crisis, despite the figures that he has given? An all-party meeting of Dorset MPs was told only a few days ago that it would not even be possible to fund the force by increasing the council tax element of its funding, because the Government had prevented that, so the force would have to lay off staff. In Bournemouth, we have record numbers of applications for all-night licensing, and funding for the policing of the town centre is already in crisis. Nothing that the Minister has said gives me any reassurance that the situation will not become extremely bad indeed.

Andy Burnham: Dorset police, like other police forces in the country, have received significant extra resources under this Government. They have been particularly creative in using fixed penalty notices and other measures that we have put at their disposal to tackle alcohol-related crime. May I take the opportunity to remind the hon. Gentleman and other Conservative Members that tomorrow they are likely to have a new leader to impress, who appears to take a different view from the hon. Gentleman and his colleagues of the changes to the licensing laws.

Community Support Officers

Michael Fabricant: What recent assessment he has made of the contribution of community support officers to reducing violent crime and gun crime; and if he will make a statement.

Paul Goggins: The primary role of community support officers is to provide high-visibility reassurance policing and to tackle antisocial behaviour. Home Office research and individual force evaluations have shown that CSOs are making a significant impact in these areas and are popular with the communities that they serve.

Michael Fabricant: I congratulate CSOs on their work, but the Minister says that that work is policing. Is he aware, however, that Metropolitan police officers refer to CSOs as plastic policemen and policing on the cheap? Is it not the case that they have no powers of arrest and that we need more police officers who can arrest and who can police?

Paul Goggins: I do not accept the hon. Gentleman's description of community support officers. Of course, I agree that we want more police officers, which is why the police force that serves his constituency now has 69 more police officers than it had in 1997. There are also 63 community support officers who were not there at all under the previous Administration, so the hon. Gentleman's area is on the way to a total of 339 community support officers by 2008. I should have thought he would be grateful for that.

David Taylor: Despite the negative comments of the hon. Member for Lichfield (Michael Fabricant), community support officers in North-West Leicestershire have been a great success. Does my hon. Friend agree that although the focus is on antisocial behaviour, as he told the House earlier, effectively tackling such behaviour can, in the medium and long term, drive down the levels of violent crime to which the hon. Gentleman referred?

Paul Goggins: My hon. Friend is entirely right, and I am grateful for his positive comments about the success of community support officers in his area. It is true that CSOs free up the time of police officers so that they can deal with more serious crime. CSOs also act as a deterrent, putting people off engaging in serious crime in the first place. All in all, the addition that CSOs make to policing is very beneficial.

Immigration

John Bercow: If he will make a statement on the points system for the admission of immigrants.

Tony McNulty: The Government published a consultation document on a new points-based system for managed migration, "Selective Admission: Making migration work for Britain", on 19 July. The consultation period ended on 7 November. We are now analysing all the responses we have received. We anticipate that we will publish the Government response to the consultation in the new year, together with a timetable on the way forward.

John Bercow: I am grateful for that reply. Given that substantial immigration will continue to be vital to our competitiveness, will the Minister confirm both that the skills advisory body will be independent and that its reports will be published regularly as a matter of course, so that we can all see for ourselves that policy is driven by the interests of the country, not by the prejudices of the worst elements of the tabloid press?

Tony McNulty: I thank the hon. Gentleman for his question, which is, as ever, thoughtful. While I am on my feet, may I commend to the House the Social Market Foundation pamphlet, "Incoming Assets: Why Tories Should Change Policy on Immigration and Asylum", which he wrote—I think that it costs £10, unless it is remaindered already? It is excellent, and his colleagues—not least the incoming leader, whoever he is—would do well to read it. If the points system is to work effectively, he is right that the skills advisory body should not only be independent from Government, but regularly publish its reports on the gaps that it perceives in the labour market and on how those gaps will be filled—if not by EU labour, then by labour from beyond that.

Keith Vaz: Will the Minister assure the House that before the final decisions are taken there will be full consultation with the officers at Sheffield and Croydon who will implement the schemes, which will dramatically change how the work permit section operates? Will he also assure the House that the large backlog at the immigration and nationality directorate will be eased before the scheme is implemented? Along with the new director general, I know that he is seeking to clear the backlog, so that cases are dealt with as efficiently and as effectively as possible.

Tony McNulty: In both cases, I can give my hon. Friend the assurances he requires. I have made sure—not least by attending a consultation session with staff from both Sheffield and Croydon—that IND staff are involved in the process, which will mean significant changes, and I assure my hon. Friend that that level of consultation with our staff will continue. I hope—if I have anything to do with it, this will be the case—that the backlog at IND at Sheffield, Croydon and elsewhere will be dealt with long before the introduction of the all-singing, all-dancing points system.

Antisocial Behaviour

Si�n Simon: what steps he is taking to tackle antisocial behaviour involving mini bikes.

Andy Burnham: The inappropriate use of mini bikes is a growing problem and incidents that disturb local residents, damage the environment and put the safety of the public at risk are becoming more frequent. A range of powers can be used to deal with the illegal use of those vehicles. The most commonly used legal power is under section 59 of the Police Reform Act 2002, which allows a constable in uniform to stop and seize vehicles, following further nuisance after giving an initial warning.

Si�n Simon: Ministers have come to the House on previous occasions to tell us about the full range of powers that the police have and on which I offer my congratulations. However, the rumour in the west midlands is that a 14-year-old asboid on a mini bike is difficult and dangerous to catch and that the police have been told not to chase them, lest the charming asboid or, indeed, the policeman should be injured. What advice can the Home Office offer the police, because if we cannot catch those involved, we cannot confiscate their mini bikes or do anything about the problem?

Andy Burnham: I fully appreciate the seriousness of the issue, because a 13-year-old boy who was riding a mini motor bike on the street died in my constituency in the summer. I sympathise with my hon. Friend and know that problems have occurred in the Brook Vale park and Witton lakes area of his constituency, although I understand that four vehicles were recently seized. I am sure that his chief constable will have heard his remarks today. I know that West Midlands police has the power, which is under trial, to issue fixed penalty notices to those who are causing harassment, and I hope that it will use that power, too.

Philip Hollobone: Is the Minister aware of the scale of the problem caused by mini bikes in my constituency? What restrictions has he considered on the sale of those vehicles to under-age youths?

Andy Burnham: I am grateful to the hon. Gentleman for bringing the scale of the local problem in his constituency to my attentionas I have said, I, too, have a significant problem in my constituency. We have introduced a significant number of powers, but he is right to draw attention to the role of retailers, and of irresponsible retailers in particular. I know that some well known high street names are selling these vehicles to young people, and I urge them to use their retailing campaigns responsibly.

Knife Crime

Alison Seabeck: if he will make a statement on measures to tackle knife crime.

Hazel Blears: Knives have no place in our schools, on our streets or in our neighbourhoods, which is why we have worked out a package of measures with the Association of Chief Police Officers to strengthen our legislation in that area. We want to tackle the knife culture, especially among young people, and engage with our communities. The Violent Crime Reduction Bill, which is currently before Parliament, will give police and local communities new powers to tackle knife-related violence.

Alison Seabeck: I welcome the Minister's comments. However, I am a little concerned that today's Plymouth Evening Herald has shocking figures showing that there have been 1,000 knife crimes in the past three years in Plymouth, and that between April and August this year there was, on average, one incident involving a Samurai sword each week. The Minister may be interested to know that following a high-profile campaign run by Devon and Cornwall police, that fell to one incident in the 37 days of that campaign. Shopkeepers, too

Mr. Speaker: Order. That is enough for the Minister.

Hazel Blears: I am delighted that my hon. Friend and her local police force have been involved in such a successful campaign in the Plymouth area. I can tell her that there is a range of measures in the Violent Crime Reduction Bill, including not selling knives to under-18s, ensuring that we can search for knives in pubs and clubs, and giving schools the power to search for knives. I can also tell her that we are working with police forces on whether we can have a general knife amnesty in the early part of next year. I believe that that will be a huge success in terms of people handing in knives. I am also looking seriously at adding Samurai swords to the list of offensive weapons because of the damage that they cause.

Pre-Budget Report

Gordon Brown: Having taken the long-term decisions to achieve and sustain low inflation and stability, the task of this pre-Budget report is to meet and master global economic challenges and to make the critical decisions to secure Britain's long-term economic future. The theme of this report is that by combining our enterprise with investments in skills and science, in infrastructure and in housing, at every point matching investment with reform, Britain can lead in the world's most wealth-generating and dynamic sectorsin science and modern manufacturing, in finance and capital markets, and in education and the creative industries. With fiscal discipline, and by matching investment with reform in welfare and in public services, we can combine a strong economy with opportunity and security for all.
	The past year has seen a virtual doubling of global oil and commodity prices. In the United States, inflation has risen to 4.3 per cent. In the euro area, inflation forced a rise last Thursday in interest rates. Across Europe and America, almost a million manufacturing jobs have been transferred to Asia, and a quarter of a million service jobs have been outsourced to that continent.
	While all countries have faced global inflationary pressures, the British economy has also had to deal with domestic inflationary pressures to achieve what we and the Bank of England identified early last year as the necessary slowing of house prices and of consumer spending, which some in this House predicted would return Britain to the old familiar stop-go cycle of overheating, inflation and recession, and which, under previous monetary and fiscal regimes, did so time and time again.
	In the past eight years, our new monetary framework has been tested: in 1997 when domestic inflation had to be curbed; and then in 1998 and 2001 when we had two global crises, the first starting in Asia, and the second the IT crash, the US downturn and of course falling stock markets around the world. Now, in 2005, tested by both domestic and global pressures, we are on course to meet our inflation target of 2 per cent. House prices, which were rising at 15 per cent. each year for three years, and at their peak rose by 25 per cent., have moderated to 3 per cent.
	This is in stark contrast to previous decades when our economy faced simultaneous domestic and global inflationary pressures, in 1990, when inflation went above 10 per cent., in 1980 to over 20 per cent., and in 1975 to over 27 per cent.; when in the past a cycle of overheating and inflation could only be brought back under control by mortgage rates above 10 per cent., recession and unemployment.
	Now today, when, more than ever, stability and low inflation are the essential foundation for investment and job creation for our future, Britain ends this year with inflation lower than America, the euro area and the European Union. We are on course to meet our inflation target not just this year but next year and the year after that.
	The average inflation in Britain from 1970 to 1997 was 8 per cent., with inflation often going above 20 per cent. Our stability since then is such that, in the past seven years, inflation has been at or around 2 per cent. [Interruption.]

Mr. Speaker: Order. Let the Chancellor make his statement. Perhaps if hon. Members catch my eye later, they can question the statement then, but not now.

Gordon Brown: As Chancellor, I have always understood that the strength of a monetary and fiscal regime is how it performs not only in good years but in this, the toughest and most challenging year for the economy. It has been a tough year, but by facing up to global and domestic inflationary pressures, inflation is notas it was in the pastabove 10 per cent. but 2 per cent. Interest rates are not above 10 per cent. but below 5 per cent. Unemployment is not, as it was in the past, at record highs but at record lows.
	The economy is not in recession; growth, even in this toughest year, is at 1.75 per cent. This is the 34th quarter of continued growth under a Labour Government. We are the first Government of any party to achieve eight years of uninterrupted growth since 1805.
	For the fifth successive year, British growth is higher than that of France, Germany, Italy, the euro area and the European Union. British business investment is already rising this year by 3 per cent. and is expected to increase next year by 3 to 3.5 per cent. and in 2007 by 4.5 to 5.25 per cent.As production grows, we expect exports to rise by more than 5 per cent. next year and the year after.
	Globally, there are continuing risks from trade imbalances, exchange rate movements and commodity price shocks. Domestically, monetary policy will continue to monitor closely the housing market and consumer spending. Domestic demand is projected to grow at the same rate of the economy. Overall growth is projected in 2006 at 2 to 2.5 per cent. and in 2007 and 2008 by 2.75 to 3.25 per cent.
	Some people said that, as we moderated the housing market and responded to the oil shock, employment in this country would fall. Some predicted that we would end this year with fewer people in work. In fact, I can report to the House that, in just 12 months, employment in this country has risen by 330,000 to 28.8 millionthe highest in this country's history. It is higher in every region and nation of the country.
	This year, the economy has been generating 6,000 new jobs every week and 3,500 new companies are being formed every week. Indeed, of the extra jobs since 1997, almost 1 million have been generated by small businesses alone.
	By tackling youth and long-term unemployment, the new deal has helped ensure that, while unemployment in America is higher than oursand in France and Germany, it is much higher, at nearly 10 per cent.in Britain, unemployment is lower than 5 per cent.
	We know that continuing that record of high employment with low inflation demands continued wage responsibility in all sectors. So the Secretary of State for Health is submitting evidence to the pay review body that the headline rise in national health service pay should be based on our 2 per cent. inflation target, and the Secretary of State for Education and Skills is announcing that, even after taking account of the normal annual increments and performance pay, the total increase in the education pay bill will be just 2.8 per cent. These are both signals of our determination to keep public pay costs under control and to contribute to continued low inflation in this country.
	On this foundation of stability, our task is to match investment with reform in science and skills, infrastructure and housing, and to show that working in partnership with the private sector, we can best meet the challenge of globalisation. Although we have already doubled investment in science, global competition requires us continuously to update our 10-year framework. With, this week, a new public private partnership, supported by 50 million of new public investment, Britain is determined to lead the world in the new frontier of genetics and stem cell research. With the establishment of a new national institute for health research in the NHS, pharmaceutical and biomedical companies have just announced a new 500 million a year investment in Britain, making Britain the leading location for research in new drugs and treatments.
	To support research and development across modern manufacturing, I am publishing today reforms to help access the research and development tax credit. The design of new products and services is now such an important sector that we propose a network of creativity and innovation centresone in each regionoffering start-up help to new design talent and supported by an expanded national centre in London to showcase British design. Because we have learned in the past that the neglect of investment in science held our economy back, we are determined to make the necessary long-term investment, with Government and private sectors working together to make us fully equipped for the global challenges ahead.
	The same is true in skills and education. The successful economies of the global era will be the high-skill economies. Published today is the interim report of Lord Leitch, the first long-term assessment of Britain's skills needs. Since 1997, we have more than doubled investment in education, and the Leitch report finds that the number of adults with skills has risen from 79 per cent. to 86 per cent. But workers will, on average, change their job seven times during their working life, and the vast majority of today's workers will need to train or retrain for tomorrow's skills. The final Leitch proposals will come next year, but to step up the pace of change now, the national employer training programme, which offers free training for employees and help for all small firms with their costs, will be expanded nationwide from next summer to provide training in 50,000 companies for 300,000 new employees a year.
	Some people seek to abolish the new deal, but, more than ever, a Britain equipped for the global economy needs a new deal that continuously equips people for jobs and skills. So this Government will not abolish the new deal; we will strengthen it. In eight areas of the country, teenagers who have too often fallen through the net and are receiving no training will be offered learning agreements: a training wage in return for gaining skills. No teenager in our country should be denied the opportunity to acquire the skills and employment that they need. With opportunities come responsibilities. The new deal pilots to help lone parents back to work will be extended to new areas of the country. From April, for men and women unemployed for six months or over, we will pilot personal action plans that involve compulsory interviews and intensive work plans.
	Our third economic challenge is to make more affordable housing available for the rising number of families seeking homes. In the last eight years, low inflation and low interest rates have given homebuyers the lowest mortgage rates for 40 years. There are 1 million more homeowners now than in 1997. But to build more affordable homes of high quality in strong communities, Britain mustas the Barker report recommendedput in place long-term reforms in planning, land use, the competitiveness of the construction industry, and infrastructure in both the private and social sectors across the country.
	The Deputy Prime Minister is today responding to the joint representations of the CBI, the Town and Country Planning Association, and Shelter. He is publishing new planning guidelines that will bridge the gap between the 150,000 new houses that we build each year and the 190,000 new households that are formed, in particular to help to build houses that young couples can afford. To provide land for new houses while protecting and improving the environment, he is asking local authorities to bring forward more brownfield areas for development. Where proposed new housing is of high quality, meeting the design code, local authorities will be obliged to accelerate planning consent. The construction industry must also rise to the challenge, particularly of investing in skills. To widen the number of investors in the residential and commercial property markets, we will this month publish legislation to set up in Britain real estate investment trusts to increase the funding for new property developments.
	Because our aim is to build not just homes but communities, and to fund the new roads, schools, hospitals and infrastructure that convert estates into genuine communities, building on the recommendation of Kate Barker, we are today publishing for consultation proposals for a local planning gain supplement, which will give local authorities a fair share of planning gains to invest locally. Investment in social housing has almost doubled since 1997 but will have to rise further. We are announcing pilot projects today to encourage local authorities to bring derelict sites back into use and to build new housing for rent.
	We know that shared equity has an increasing role to play in helping young couples in all our constituencies to get on the first rung of the housing ladder, and I can tell the House how we plan to extend equity share schemes. I can announce that three of the biggest building societies and banks have joined the Government as partners in shared equity; that building companies, including four of the biggest builders, are also now able to offer shared equity purchases; that we are now in discussion with investment companies on their possible involvement; and that we see a possible role for housing associations in extending shared equity.
	Our aim is a new consensus across our country on the extension of home ownership and affordable housingpublic and private sectors working and investing together to strengthen the economy, protect the environment and meet the housing needs not just of some but of all in our country.
	As part of the figures that I am publishing today, let me confirm that already this year the first 4.7 billion of savings identified by the Gershon review have been achieved, with the Government's target of 3 billion in procurement savings exceeded by 1 billion, one year early. On target, we are also seeing a further 18,500 reduction in civil service posts, including 10,000 from the Department for Work and Pensions and 3,500 from Revenue and Customs. I can also confirm that we are on target with the relocation of a further 2,000 civil service posts out of London. Ahead of schedule, 5.7 billion of assets have been sold, on target to meet our objective of 30 billion of sales by 2010. In the coming year, we will conduct a zero-based asset review.
	In addition to the new measures that we have announced to implement our new risk-based approach to regulation, I am proposing at the EU Finance Ministers meeting tomorrow competitiveness tests for all new and existing European regulations. I am closing a relief under which, for tax reasons only, people are being persuaded without changing what they do to set up a company, replacing the 10,000 starting allowance with a rise in the investment allowances for smaller business to 50 per cent.
	I have today written to the European Commission asking for a derogation so that over 1 million businesses with turnovers not at the current two thirds of a million but at one and a third million or less will be able to take advantage of more flexible VAT payment options that will suit their business needs.
	After consultation with British film makers, I can announce a new film tax credit to support British films. To increase support directly for producers, we can guarantee a credit worth 16 per cent. for large-budget films and at least 20 per cent. for small-budget films.
	Anti-avoidance and fraud measures published today, including new requirements for disclosure, will address artificial tax arrangements involving capital gains and losses, trusts and offshore companies, rebated oils and the misuse of self-invested personal pension schemes to purchase second homes.
	From reallocations to local councils from Departments, 305 million in 2006 and 508 million in 2007 will be made available to reduce pressures on the council tax. Later this afternoon my hon. Friend the Minister for Local Government will give full details to the House.
	I can tell the House that the current budget deficit, which reached a peak of 55 billion in 1993, will fall from 19 billion last year to 10 billion this year and then to 4 billion, and then zero. There will then be a surplus of 7 billion, then 11 billion and then 13 billion in future years, meeting the fiscal rule in this cycle by more than 16 billion, in contrast to the deficit over the last cycle, 198697, of 157 billion.
	It is on the basis of this fiscal rule and our second fiscal rule, the sustainable investment rule, that the Government will plan our 2007 spending review, including our response to the long-term reviews on transport, pensions, energy and skills. Our second rule allows us to borrow for essential public investment, as long as there is a sustainable level of debt.
	In 1997, the capital investment being made by this country in schools and colleges was just half a billion pounds a year. Today, we are investing 7 billion a year, and we are on track to renovate 12,000 more primary and secondary schools in our country. In 1997, Britain invested just over 1 billion a year in building and renovating our hospitals. Today the figure is 5 billion and it is rising to 8 billion by 2008. And investment in transport is doubling.
	In total, net public investment, which was just 5 billion a year in its overall total in 1997, will this year be 26 billion and next year 29 billion. Even with this record investment, we meet our second rule, which ensures borrowing for investment within sustainable levels of debt. Net debt levels will be 36.5 per cent. this year and in future years 37 and 37 per cent., and then 38, 38 and 38 per cent., at every point lower than today's 44 per cent. in France, 47 per cent. in America, 60 per cent. in Germany and 80 per cent. in Japan. So, our debt levels are lower than those of our major competitors. Even as we borrow not for short-term consumption but for long-term investment, our borrowing levels are lower than that of our competitors. Total net borrowing, which reached 51 billion in 1993, will fall from 37 billion this year to 34 billion, 31 billion and then 26 billion, 23 billion and 22 billion. Cyclically adjusted, our net borrowing this year is just 2.2 per cent. of GDP, and it will fall to 1.6, 1.6 and 1.6 per cent., and then 1.5 and 1.4 per cent. in the years that follow.
	Within these figures public investment, which I remind the House was just 5 billion in 1997, will continue to rise to 31 billion in 2007, then 32 billion, 34 billion and finally 35 billion in 2010. That is on average 40 million a year today per parliamentary constituency rising to 55 million a year by 2010, contrasted to just 10 million per constituency in the years before 1997. In just five years, from now until 2010, Britain will see more investment in its social and economic fabric than in the entire 18 years from 1979 to 1997.
	Our two fiscal rules enable us to meet the country's priority to invest more not just in schools and hospitals but in transport, housing and, of course, in sport and the Olympics. I have, however, noticed representations that a third fiscal rule should be adopted. It is, each and every year, irrespective of the needs of the economy and the case for investing in public services, to restrict public spending growth to a lower rate than the growth of the economy in order to cut taxes. On closer examination, what has been called sharing the proceeds of growth would mean this year spending at least 12 billion lower and, by next year, 17 billion lower than plans, and I have concluded that this rule, however rebranded, is simply a new gloss on an old proposal advanced before previous Budgets, which would undermine our public services, our infrastructure and our economy.
	It is our commitment to investment for the long term that allows us not only to address global economic challenges but to combine prosperity with fairness to all. Within the fiscal figures we can now do more to help families, the elderly and young people, and to meet our obligations on security and defence.
	Defending our country is the first duty of Government. In response to the bombings in London in July and to the terrorist threat, it is right to do all that we can to support our police, our armed forces and our security and emergency services, whose bravery we commend and on whom we depend each and every day for our security and safety. Since 11 September we have doubled the budget for national security. Today we are making available an additional 135 million for security and counter-terrorism, and we are providing an additional 580 million for the armed forces for Iraq, Afghanistan and other international obligations.
	At the end of a year in which we have seen the doubling of aid to Africa, promised at the G8 summit, and of debt relief, multilateral and bilateral, to 100 per cent.which is just the start of what we must do in future yearsthe Secretary of State for International Development, to expedite the critical negotiations on trade, is offering to treble Britain's aid for trade to 100 million. It is unacceptable that the world is insufficiently prepared for natural disasters, so Britain will contribute to an expanded United Nations emergency fund. We will also contribute 50 million to a new IMF shocks facility.
	Child tax credit is benefiting 6 million families, with 1.5 million poor children already lifted out of poverty. The mobility of our economy is now such that each year 200,000 men and women who move into new and better jobs see their family incomes rise by more than 10,000. Some have suggested that we should cut back child tax credit. This I refuse to do because, with child benefit, child tax credit is doing more to help families meet the costs of bringing up their children, and helps more families out of poverty, than any single measure from any previous Government.
	Although a case has been made for fixed awards based on last year's incomes, to which we will continue to listen, it would be better to have a system that responds flexibly to changes. While requiring earlier notification of changes in circumstances, the Paymaster General is today making a detailed statement that from April next year we will allow annual income changes not of 2,500 but of up to 25,000. That will cover 95 per cent. of all income rises during a year. Where recovery takes place during the year, we will adopt new rules on repayment to address potential hardship.
	Our policy is opportunity for all, and it is matched by responsibility expected from all. Today the Treasury and the Department for Education and Skills are jointly publishing plans showing how parents who want to do their best by their children can be given the support that they need, from child care tax credits and maternity pay to support for parenting at Sure Start centres and the increase in mentoring for children in care that we are announcing today.
	But what parents often seek is early help, the most effective measure and the best hope we have to keep children out of trouble later. There are a dozen agencies that often duplicate each other's efforts without reaching that troubled child. To inform decisions in our spending review, the Secretary of State for Education and Skills is piloting a new conceptthat of one lead professional, based around the school, using funds brought together in one budget, with the authority to identify problems early and the freedom and capacity to intervene quickly and do what is right before a child's future is blighted.
	The oil shock of this year has led to calls for more efficient use of energy and support for alternative fuels. Today I am enhancing the capital allowances for production of the most environmentally friendly biofuels. That will include help for oil companies to meet the agreed biofuel obligations.
	Carbon capture and storage protect the environment from carbon emissions by containing them at source and transporting them to the North sea, where they make it easier to extract remaining oil from mature fields. I can announce a new partnership with the Norwegian Government. Together we will consider the right level of incentives to speed up the adoption of this important new technology. Because the United Kingdom can also become a world leader in clean coal, the Secretary of State for Trade and Industry is today announcing further support for clean coal and all carbon abatement technologies. That is part of our wider energy review.
	Because we need to encourage energy efficiency in small and medium-sized businesses, the Secretary of State for Environment, Food and Rural Affairs is today announcing further funding for the Carbon Trust.
	So that all import capacity for gas is put to use, Ofgem is announcing today that it will use its powers to intervene where necessary to ensure that importers either use or lose their capacity to import. The Secretary of State for Trade and Industry and I have today written to the European Commission supporting Ofgem's call for an urgent investigation to make sure that this winter there are no blockages to the full use of the interconnector with Europe and thus no restriction on imports of gas from Europe.
	Our economy has had to withstand an oil price rise from around $25 to a current price of around $55, which is also close to the level of almost all future projections. Returns in the North sea are now nearly 40 per cent. on capital, compared with ordinary returns of 13 per cent. With the tax on new development in the North sea now lower than in the USA, the Gulf of Mexico, Norway, Italy and Australia, and in order to strike the right balance between producers and consumers, I will raise the supplementary North sea charge from 10 per cent. to 20 per cent., while giving new incentives to companies for exploration and development of the most difficult fields by extending the exploration expenditure supplement to all their ring-fenced activity.
	I am also now able to freeze petrol and diesel and road fuel gases duties for this full financial year at an Exchequer cost for the full year of 600 million. I am also able to set aside resources, so that the winter fuel paymentthe universal payment tax free to all pensioner householdswill be 200 not just this year, but next year, the year after that and every single year of this Parliament, and it will be 300 for the over-80s, paid every year before Christmas.
	In addition to the winter payment, I want to ensure that for pensioner households energy costs are as low as possible while ensuring the most efficient and effective heating system against the winter cold. Insulation and central heating can reduce heating bills for the typical pensioner household by 300 a year. The energy savings are so great that no pensioner household should be without insulation and no pensioner should be without help to install central heating. After many years, it is time to complete that insulation and the installation of central heating where it is possible to do so.
	The Government's warm front programme has so far insulated 1 million homes but there are still 500,000 with no central heating and 2 million without insulation. Separate announcements will be made for Scotland, Wales and Northern Ireland. By setting aside an additional 300 million over the next three years, the Government's warm front programme will not only be able to offer pensioner households on pension credit free installation of central heating, but we will offer all other   pensioner households without central heating 300 towards the costs of installing it. We can go further. I am grateful to the energy companies that are matching our offer by announcing this afternoon that they will extend their offer of insulation. There will be free insulation for all pensioner households on pension credit, with, for all other pensioner households, between 125 and 175 paid towards the costs of insulation.
	Let me conclude with a set of measures in an area which is not fashionable today, but I believe vital for the long-term future of our country. It is an area where we can make progress only if the Government invest and work together with the voluntary and community organisations that are at the heart of every community in this country. A responsible society requires strict measures to combat vandalism and violence. It also requires that society fulfils its responsibility to encourage what is best in our young people, and we have to do far more where in the past too little has been done, investing in youth and community facilities that are modern, relevant and welcoming for teenagers up and down the country.
	Today, I can announce an agreement with the banks and building societies that unclaimed assets held in bank accounts will, once realised, be put to use to improve youth and community facilities throughout Britain. It is right for us as a Government to make a start now. First, the Government are joining with seven of Britain's leading companies to launch the country's first national youth community service. With up to 100 million of initial finance, it will fund gap-year volunteering in Britain and abroad for young people who otherwise could not afford gap years, and it will fund part-time and full-time community service in every constituency. Secondly, because we want the 2012 Olympics and, beyond that, any English bid for the 2018 World cup, to regenerate sport for young people in our country, the Culture Secretary and I are today announcing details of a national sports foundation, modelled on the Football Foundation's successful investment in football facilities. We will invest new money in improving facilities, amenities and participation across all sports in every area of the country.
	But as the Youth Green Paper said, more can be done not only to support wider youth services, but to put decisions about the programmes for young people in the hands of young people themselves. So as a first step, we will provide finance for each local authority to set up a young people's fund; for amenities and activities run by young people, and decided on by young people themselves. On average, half a million pounds will be provided for each local authority over the next two years, so that they can strengthen local communities.
	Stability is the foundation. More investment, not less; responsibility from all; opportunity for all, not just the few: I commend this pre-Budget statement to the House.

George Osborne: Let me begin by welcoming the measures that the Chancellor announced on trade justice, the international finance facility and debt relief for the poorest nations, which we support. We also support the new measures on youth projects and the extension of shared equity schemesa policy that, as he well knows, we proposed at the last general election. We will study the proposals on planning, but we believe that decisions on planning should be taken by local communities, not by unelected, unaccountable and unwanted regional assemblies.
	The real story from today's report is that the Chancellor's deficit has gone up to 10 billion. He is borrowing 151 billion over the next five years17 billion more than he predicted. He has just announced that growth this year is half what he predicted before the general electionhe did not linger on it, but I understand that to be his announcementand his forecast for next year is also lower. [Interruption.] His golden rule is now tarnished and discredited; productivity growth has slumped; business investment has collapsed; and this year, Britain's economic growth is among the weakest in the developed world. [Interruption.]

Mr. Speaker: Order. It is not the habit of the hon. Member for Northampton, North (Ms Keeble) to shout; perhaps she should not do so today.

George Osborne: Thank you, Mr. Speaker.
	The Chancellor was supposed to come to the House to deliver an accurate report on the state of the British economy; instead, his speech sounded more like tractor production figures from the old Soviet Union. This is a tragic story of a Chancellor who has been forced to wait so long to get into No. 10 that his reputation in charge of No. 11 is crumbling. This is the iron Chancellor, who has single-handedly destroyed the public finances; theprudent Chancellor, whose means-testing has devastated pension savings; the business-friendly Chancellor, who is presiding over the lowest rate of investment in business since records began; the progressive Chancellor, whose own shambolic tax credit scheme has left families relying on food parcels; the long-serving Chancellor, who is now presiding over a long-term decline in this economy's ability to compete. No wonder he looks so gloomy. The longer he stays at the Treasury, the more his chickens are coming home to roost. For this is a Chancellor who is the roadblock to reform; a Chancellor who is now holding Britain back.
	Let us look at those growth forecasts. In March, the Chancellor told us that the economy would grow by 3.5 per cent. In September, he downgraded that to 2.5 per cent. and todayin case you missed it, Mr. Speaker, because he rushed through that bithe downgraded the growth forecast again, to 1.75 per cent. He also downgraded it for next year. I do not remember him telling the electorate before the general election that the economy was facing a tough and challenging year. What he told the country at the time of the election about the state of the economy was not true, and it is difficult to believe that he did not know it at the time.
	When the Chancellor was comparing us with other countries in his statement, why did he not want to tell us that this year our economy is growing more slowly than 18 of the 25 members of the European Unionslower, to date, than Germany, Ireland and Spain? Why did he not tell us that our growth in the last quarter was slower than every major economy in the world except Italy?
	The Chancellor blames the high price of oil, but that hardly explains why our oil-exporting economy is growing slower than other oil-importing competitors. He blames weak overseas markets, but almost every other developed economy is growing faster. The Governor of the Bank of England told us the true cause last month. He said that a sharp rise in taxes has caused a sharp slowing of household incomes and economic growth. But what is the Chancellor's response today? It is more stealth taxes, including a doubling of the supplementary tax rate on oil companies[Hon. Members: Hooray!] He can go back to Scotland and tell them about that. We also heard about a new land development taxa tax on affordable homeswhich is something that all Labour Governments do when they run out of money.
	With all the Chancellor's extra taxes, it is amazing that he still has a budget deficit. But he doesand that is another forecast that he got wrong. First, he told us that there would be an 8 billion surplus this year. Then in March he changed that to a 6 billion deficit. Today, the deficit has gone up again. Why was he in such a rush to go through his borrowing figures? He should have slowed down. He should have told us that he plans to borrow 37 billion, 34 billion, 31 billion, 26 billion, 23 billion and 22 billion, or 151 billion over the next five years.
	The fiscal rules were supposed to keep the deficit and the debt under control. The Chancellor was meant to have fixed his spending to fit his golden rule. Instead, he fixed his golden rule to fit his spending. I congratulate the Chancellor on finally adopting our policy of making Government statistics independent, so that he cannot fiddle with the nation's balance sheet anymore. Why does not he also set up an independent body to monitor the golden rule? That way, he will not be able to claim that an entire economic cycle began without anybody else noticing.
	The Chancellor talks about the great challenge that Britain faces from China and India, but with falling research and development, falling productivity growth and falling business investment, his policies are simply not rising to that challenge. They are holding Britain back. In 1998, he said that
	Productivity . . . is a fundamental yardstick of economic performance.
	Does he remember saying that? Well, he did. So let us use his own yardstick. In 1998, productivity growth averaged 2.75 per cent. Today, it is 0.5 per cent., or one fifth of the rate that he inherited. If productivity was his fundamental yardstick, he has failed fundamentally on his very own measure.
	Unreformed public services are holding Britain back, too. The Prime Minister will remember telling his party conference that each time he had tried to reform the public services he wished that he had gone further. Well, who stopped him? Who frustrated him? It was the Chancellor of the Exchequer, the roadblock to reform. He blocked health reform. He blocked education reform. He blocked welfare reform. Now he is blocking pension reform, too.
	With all the talk of reports in the pre-Budget statement, why did not the Chancellor mention the Turner report more than once? The fact is that he sabotaged the Turner report, even though it is his means-testing and his pensions tax that has destroyed savings. The man who created the pensions crisis is the very same man who is standing in the way of providing a solution. No wonder Lord Turner describes the Chancellor's position as
	not a contribution to a sane argument.
	How the Prime Minister must love Lord Turner. This country needs a Chancellor who is interested in reforming Britain for the future, not in defending his failed policies of the past.
	I have no doubt that when the Chancellor gets up, he will deliver in public all those one-liners that he normally reserves for the Prime Minister in private, but let him answer these simple questions. Why were his growth forecasts so wrong? Why is the deficit so high? Why is productivity so weak? Why is investment in business down? Why is red tape up? Why is bureaucracy up? Why are taxes on the rise? Why did he sabotage Turner? Why does he block every real attempt to reform public services? Let us hear his answers. Let us hear why he is holding Britain back.
	The Chancellor could have used today's report to prepare our economy for the future, to set out the reforms this country so desperately needs, but he did not. Instead, this is a Chancellor forced into the humiliation of admitting that he got it all wrong. This is a Chancellor who is past his sell-by date. This is a Chancellor who is holding Britain back.

Gordon Brown: Why does[Hon. Members: Answer.] I will answer each question, but why does the shadow Chancellor not have the courage to come to the House and say to the House what he has been saying outside it. I have the article he has written

Hon. Members: Answer.

Mr. Speaker: Order. I will decide whether the Chancellor of the Exchequer is answering in a proper way. I will be the judge of that.

Gordon Brown: I have the article that the shadow Chancellor published only a few days ago. What does he say? In place of all the allegations he made today, he talks about
	Labour's success on macroeconomic policy.
	Then he says that Labour has improved the macro-economic management of the UK economy and that Labour has established economic credibility. He then says that there is public confidence in Labour's
	ability to manage the economy.
	Then he says, against the Conservative party, that its short-termism
	has hampered . . . a long term economic policy
	for the country. Then he says that Conservatives
	still lag a long way behind the Labour party when it comes to public confidence in our ability to manage the economy.
	The reason why the hon. Gentleman cannot acknowledge that we have the longest period of sustained growth, the lowest inflation, the lowest interest rates for 30 years and the highest employment ever is that he knows that at no point under a Conservative Government would that ever have been possible to deliver.
	In the Financial Times on Saturday, the hon. Gentleman complained that I had been too brutal with him in the last three months, but having heard his speeches I am afraid that I have not been brutal enough. They say that the Conservatives are about to skip one generation. Perhaps it is time that they skipped another one as well.
	On forecasts, the only party in this country in the last 30 years that has forecast growth and given us recession is not the Labour party, it is the Conservative party. On productivity, which the hon. Gentleman mentioned, the only party that has had negative productivity growth in this country in the last 30 years is the Conservative party. On manufacturing, the only party that has had negative manufacturing growth is the Conservative party. On child tax credits, I think the whole country will resent the fact that the shadow Chancellor suggests that somehow the Labour Government are putting children into poverty when it was the Conservative opposition to child tax credits and to child benefit that put so many children into poverty.
	Why will the hon. Gentleman not defend his own policies? [Interruption.]

Mr. Speaker: Order. I have given the Chancellor a lot of elbow room, but the policies of the hon. Member for Tatton (Mr. Osborne) are nothing to do with the Chancellor. I know that he has disowned himself in that way, but perhaps he can continue.

Gordon Brown: The hon. Gentleman complains about investment. Business investment was 87 billion in 1997; it is 110 billion this year. How can he say that there has been a collapse in business investment when business investment continues to rise? He says that the new deal is not working, but we have 330,000 more people in jobs this year. He complains about our regulation, but we are getting rid of some of the ridiculous regulatory agencies created by the Conservative Government. We the Labour Government are taking to Europe the proposal to put a competitiveness test on regulations and to end the gold-plating of European Union regulations.
	The Conservative party's policies are to abolish the new deal, to cut the child tax credit and to announce[Interruption.] The hon. Gentleman said that our growth was lower than that of Spain and Ireland. What he did not say is that our growth is higher than that of France, Germany, Italy, the euro area and the whole European Union. If he wants to look at differences in growth in the economy, let us look at the comparison between two recessions under the Conservative Government and growth in every year under a Labour Government.
	The hon. Gentleman's policies are to abolish the new deal, to scrap the child tax credit[Hon. Members: What are your policies?] Conservative Members do not like it, do they? At the last election, they said that they would spend more[Interruption.]

Mr. Speaker: Order. The Chancellor will assist me by not referring to the Conservative party's policies. I know that he has got a lot of material there, but perhaps he could use material that will not embarrass the Speaker.

Gordon Brown: Our policy is to keep the new deal, to keep children out of poverty, to increase public investment in this country and to increase enterprise efficiency and productivity in our economy. The Conservatives were in power for 18 years; from what we have heard today, they will be out of power for 18 years.

Vincent Cable: Three years ago, the Chancellor told us that Britain was recording its best economic performance for 50 years. Two years ago, he told us that it was the best economic performance for 200 years. On his last outing, he told us that it was the best economic performance for 300 years. We are all rather disappointed that he has not come along today and told us that he is outperforming the Romans.
	The Chancellor has demonstrated his talent for producing rabbits from hats, while disregarding the big long-term challenges, such as creating a sustainable state pension system and reforming the unfair system of local taxationbut we welcome some of his rabbits. I am glad that he has listened to representations from Liberal Democrat Members and others and scrapped the tax relief on second homes under the self-invested personal pension scheme. That is very welcome. I also welcome the substantial relief from overpaymentthe 25,000 ceilingthat he is now giving on tax credits.
	The Chancellor is having to acknowledge, however, that we are now in the process of what economists call a growth recession. It might have been desirable if he had gone next door to the Prime Minister to ask for a short seminar on how to do humility, but instead he has tried to blag his way through by blaming the problems on the oil producers and slow-growing Europe. He knows that that is complete nonsense. If the problem is oil, why are the oil-importing United States and Japan booming? If the problem is a slow-growing Europe, why has Britain been consistently outperformed by Sweden and Spain? The problems, as he well understands, are domestic.
	Does the Chancellor accept the explanation that a large part of the slow-down in consumer spending is caused by growing anxiety about private debt? Does he accept that the share of our income that is spent on debt servicing20 per cent.is almost the same as it was when personal finances collapsed under the last Conservative Government? If he does not accept that explanation, does he accept the explanation of the Governor of the Bank of England that consumer anxiety about taxation has produced the slow-down in spending? How does he explain the fact that private investment in the economy is half what he forecast in the Budget? In particular, why has commercial research and development fallen, despite the fact that he is spending 800 million a year of taxpayers' money subsidising it?
	The Chancellor is quite right to say that the big long-term challenge is about public spending, the public finances and how to make tough choices on public spendingwe endorse that. However, may I ask him a series of specific questions? Can he explain why no Treasury Minister publicly contradicted the Home Secretary after he promised that compulsory identity cards would be made available free of charge at a cost of 6 billion to the Home Office, excluding the cost to other Departments? Has the Chancellor put any financial limitations on the Prime Minister's expressed enthusiasm for nuclear power? Will there be any limitation of the subsidies and guarantees that could become available?
	The Chancellor has written eloquently in the past few weeks about the evils of the common agricultural policy. Can he explain why the Prime Minister is now on the brink of surrendering 1 billion of British taxpayers' money, despite having achieved no single concrete concession on the common agricultural policy? Can the Chancellor explain where he was when his deputy and the Secretary of State for Trade and Industry reached an agreement on public sector pensions that was such that a rising star in the Treasury could join the civil service at 20 or 21 years of age and retire 40 years later on a generous final salary scheme, while the rest of the population has money purchase pensions, or a state pension scheme that Lord Turner has described as not fit for purpose?
	In conclusion, I speak as someone who I think has more time for the Chancellor than many of his own colleagues. Why cannot he stand up in Parliament and say, Yes, indeed I am proud of my record as Chancellor in presiding over economic stability and low unemployment and fighting povertyI endorse all those thingsand also say, I have made mistakes. We've exaggerated the projections and there has been administrative over-centralisation.? Why cannot he simply stand up and acknowledge his own failures?

Gordon Brown: I, too, have a great deal of time for the shadow Chancellor who resides in Twickenham, rather than the shadow Chancellor for the Conservative party. However, the hon. Gentleman must recognise what has happened to the economy during the course of this year: we have been able to maintain stable growth.
	When the hon. Gentleman gave his press conference on Thursday, he said:
	Compared with Europe Britain has . . . low inflation.
	On public sector debt, he said:
	The big picture is basically very good.
	On investment in public services, he said:
	There has been an enormous injection of money into the public services, which we support.
	On employment, he said:
	A world where we have full employmentthis is, you know, Gordon's great achievement.
	On monetary policy, he said:
	Monetary policy has generally been a big success story.
	He acknowledged all those things; at least he did so at a press conference, while the Conservative shadow Chancellor tries to write them in an obscure article that he hopes that no one will be able to read.
	The fact is that the Liberal Democrats have dropped all their tax proposals, but are still making public spending commitments. If the hon. Gentleman is really going to be a successful shadow Chancellor for the Liberal party, he must stop the barrage of public spending commitments that have been made by his spokesmen and women in only the past few days. I have press releases that have come out on transport, the Home Office, child care, more money for dentistry and, of course, the Liberals' London manifesto. They are all public spending commitments, but the hon. Gentleman has dropped all his tax pledges and has no way of paying for them. As far as we are concerned, a public spending review will take place in 2007. All the issues the hon. Gentleman raises will be examined during the course of that.
	On public sector pensions, the hon. Gentleman should know that 13 billion of public sector money was saved as part of the negotiations. All the other issues will be part of our public spending review in 2007. I would rather be in my position on public sector finances, looking at increased public investment and taking the right decisions for Britain, than in his position of being forced by his colleagues to drop all the tax plans while still being unable to control their spending plans.

Martyn Jones: I am sure that my right hon. Friend's proposals to use unclaimed money in so-called dormant bank accounts for youth and community programmes will be welcomed. Will he ensure that the banks do not use the definition of dormancy as a way of hanging on to that money unnecessarily?

Gordon Brown: I am grateful to my hon. Friend for that. He has taken an interest in unclaimed assets for a long time. The problem has been dealt with and considered by successive Governments for many years. It involves a negotiation with banks and building societies, and there is still the issue of pension funds and insurance companies to address.
	However, as far as banks and building societies are concerned, he will see in the print of the Treasury documents that an agreement has been reached whereby once the money is released from the dormant assets, it will be used for youth and community services. The full negotiation on the detail of the money to be released is still to be completed, but there is an agreement in principle, first, that the money will be provided and, secondly, that it will go to youth and community services, and some to financial education. That will allow us to build the youth and community services that our country has long needed. Those have been neglected. As each of us, in every one of our constituencies, knows, young people are being asked to behave properly, and so they should, but at the same time they say that they do not have proper community and sports facilities. If we can make an impact on that with the unused assets, it would be a great advance for Britain.

Kenneth Clarke: Surely even the Chancellor would agree that, since this time last year, the main event is that British growth has fallen below the most pessimistic independent forecasts. It is now among the lowest in the developed world and in the last quarter was the lowest in the G7 apart from Italy. It is unlikely to recover quickly because it has been accompanied by a fall in personal consumer demand, crushed by the level of household debt, and an impending fall in public demand because of the fiscal crisis and mounting debts. Even if the people who still believe in his fiscal rules and his description of the public finances also believe in fairies, does he accept that the two big economic announcements of new taxes are both dangerous? Oil tax slowed down development of the North sea gas fields in 2002 and a land development tax has never worked and will go against all his measures to restore the housing market.
	Given that the right hon. Gentleman is planning to slow down the rate of public spending beyond 2008, does he not accept that he has to accelerate that and, before his review in 2007, show that it is possible to slow down public spending without sacking policemen, doctors and nurses? Does he also accept that he will not be a responsible Chancellor until he demonstrates that he can do that and unless he gets on with it now?

Gordon Brown: I know that the right hon. and learned Gentleman makes a more comprehensive contribution to the debate than the Conservative Front-Bench spokesman, but if he reads the Conservative research department brief, he will find himself misled about what is happening to the British economy. Despite what he says, growth is higher than it is in France, Germany, Italy, the euro area and the European Union. The figures, as published, show exactly that.
	As for his objections to our two policies, the land development proposals are part of a consultation document. We look forward to the consultation that will take place over the next few months. However, on planning gain, when builders make money out of the sale of development land where infrastructure is needed in areas where housing is being built, the question is not whether the infrastructure should be provided, but who takes responsibility for financing it. The right hon. and learned Gentleman may agree with me that the developer and companies should make a contributionindeed, a bigger contributionto the development of the infrastructure. This is an argument that we can have in the next few months, and it is an argument that is certainly needed if we are to build the houses that we need in this country.
	I disagree with the right hon. and learned Gentleman's statements on oil. The argument is exactly the same as the one that we advanced, to which he refused to listen, on the effect of VAT on fuel. He has to face the fact that returns on the North sea, at about 40 per cent., are quite different from the returns on ordinary investment in other firms. He has to accept that even in countries such as America, tax measures are being considered or used to ensure that more of the return from changes in oil prices comes to the consumer. In the past three years $1.2 trillion has been transferred from consumers to producers because of the escalating price of oil. I think that if he were Chancellor, he would be the first to want to do something about that.

Andrew Smith: While congratulating my right hon. Friend on his statement, may I welcome in particular what he said about housing? Does he agree with me that building more homes, especially in areas such as central Oxfordshire where his science investment is so important and welcome, can both increase economic growth and tackle acute housing need? Is not that precisely the combination of social justice and economic opportunity that will be welcomed by businesses large and small, by public services and especially by those who desperately need housing and whose hopes are blocked by Conservatives in local government?

Gordon Brown: I agree with my right hon. Friend and thank him for his contribution to the debate over many years. The fact is that we have to face up to the need for housing and for infrastructure around housing. Those who are not prepared to face up to that fact will find either that waiting lists for houses in their local authority areas grow, or that we are unable to attract to this country some of the people whom the financial services industry and other industries need for their expansion. Given the increasing number of households, it is necessary to be able to build more houses. We have made a number of proposals on planning, land use, social housing and the development of shared equity. I had hoped that there could be an all-party consensus on what needs to be done to build the houses that we needhigh-quality, affordable houses that build communities as well as homesbut if that is not to be, we will have to press ahead to make sure that we build the housing and infrastructure of the future and do not get stuck in the past.

Stewart Hosie: Today the Chancellor has announced a doubling of the North sea supplement from 10 per cent. to 20 per cent., in effect creating a 50 per cent. corporation tax regime in the North sea or imposing a 25 per cent. hike in tax on the sector. Is he aware, as many in the industry are, that that fiscal regime may well lead to a rapid and irreversible loss of key resources, skilled people and equipment; that that resource flight may in turn lead to the loss of many of the 260,000 jobs in the sector, 60 per cent. of which are in Scotland; and that it may lead to the sector being unable to deliver the benefits to the economy that it has been delivering? Is the Chancellor confident that the 1 billion cash grab that he has made today will not lead to a massive reduction in revenue in the medium and long-term future?

Gordon Brown: First, we have given new incentives for the development of smaller oil fields. Secondly, the hon. Gentleman will know that the tax rates on new developments in other parts of the world are higher than they are in Britain and that we are bringing ours into line. Thirdly, the hon. Gentleman has to face up to the fact that the oil price when we established our regime was between $22 and $28 a barrel. Even in the last year it was estimated to be about $40, but it has risen to nearly $70 and fallen back to $55 a barrel. It is right to strike a balance between the needs of producers and consumers. The last people who can complain about taxation in relation to Scotland are the Scottish National party. In the past few weeks and months in the Holyrood Parliament SNP Members have proposed more money for child care, more money for children in care, more money for the fishing industry, more money for GPs, more money for police officers, more money for the arts, more money for local authorities and more money for social workers. They could not pay for any of it under their party's plans.

John McFall: I welcome the Chancellor's announcement of 1 million new homes and in particular what he said about shared equity schemes. Can we encourage more building societies such as Halifax and Nationwide to become involved in that important scheme?
	I realise that negotiations on unclaimed assets are continuing with the banks and building societies. Will my right hon. Friend ensure that the money is not only distributed from those sources, but that, as in the Republic of Ireland, local communities are able to put in bids in relation to their own areas? They know their areas well and they know how to build them up, and it is important that they share in the windfall.

Gordon Brown: I am grateful to my right hon. Friend. I look forward to discussing those issues with the Treasury Committee on Thursday. On unclaimed assets, we are publishing more information today, and the debate about the way in which those assets can be used in other areasnot just the banks and building societieswill continue. I look forward to dealing with all the other issues raised by my right hon. Friend at the Select Committee on Thursday.

Peter Tapsell: Does the Chancellor feel any sense of anguish that his tax policies have wrecked the retirement expectations of millions of our occupational pensioners?

Gordon Brown: If the hon. Gentleman looked at the issue, he would see that pensioners in Britain today, with the measures that we have introduced, are better off than they would have been if a Conservative Government had been in power. Not only has the basic state pension risen faster

Peter Tapsell: What about occupational pensions?

Gordon Brown: Let me deal with the question in my own way. The basic state pension has risen faster than inflation. We have introduced pension credit, as well as the winter fuel allowance and free TV licences, which the Conservative party opposed at one stage. As for occupational pensions, the savings regime and the pension tax reliefs in this country are designed to help people save more for their retirement. We will have a debate now[Interruption.] The savings ratio in this country is higher than in America, the fastest growing country in the industrialised world. The British savings rate is higher and has been[Interruption.]

Mr. Speaker: Order. Perhaps, one day, the hon. Member for Braintree (Mr. Newmark) may have a chance to put a case, but not today. It is the Chancellor of the Exchequer who is replying.

Gordon Brown: The debate on occupational pensions will continue as a result of discussions on the Turner report.

Helen Goodman: Employees at Glaxo in my constituency will undoubtedly welcome what the Chancellor said about the pharmaceutical industry, and the employers at Farmway will undoubtedly welcome what he said about the capital allowances for biofuels. Can he confirm that, in addition to those measures, he will continue to support the science base, unlike the Opposition parties?

Gordon Brown: I am grateful to my hon. Friend, who has a great knowledge of these issues, having worked on many of them as an official at the Treasury. She takes a special interest in science and the environmental issues that led us to introduce the proposals on biofuels. Let us be honest: the science base of this countryone of the most inventive countries in the worldhas been neglected over the years. The fact that we now have a 10-year plan for science and are doubling investment in science is essential for our global economic future. The medical investments that are now under way as a result of the partnership between the NHS, universities and pharmaceutical companies will lead to 500,000 of new investment in the next few years, with the potential for 1 billion-worth of new investment just in medicine and medical science. That is one step towards Britain leading the way in a range of medical and other sciences, which means that we will be well placed to be one of the great success stories of the global era.

John Hayes: We must assume that the real estate investment trusts that the Chancellor announced are based on the American modelthey will be straightforward, simple and offer real incentives to investorsand are not based on the Treasury's original thinking that they should be revenue neutral. Does he not realise that previous land development taxes have failed, partly because of their complexity, but also because developers speculated against political change? Given the profits to be had, people will hold back development in the expectation of a change of policy, such as tax abolition. That means that there will be less land available for development, house prices will go up and home ownership will become a distant dream for a new generation of Britons under this Government.

Gordon Brown: The hon. Gentleman had better look in detail at the consultation document published today. The fact of the matter is that in an honest debate about what planning gain involved in the past, the amount of planning gain resources that have been given to local authorities for the building of infrastructureschools, hospitals, but particularly transport and especially roadshas been small in relation to the needs of those local authorities. He would agree that if we are expanding the number of houses and if a development gain is being made it is a fair question as to how it is shared between the different beneficiaries and the different groups in a local area. That is what the debate about the planning gain supplement is about. It is a local planning gain supplement, because the money will principally go to local authorities and local areas where housing development is under way. As I understand it, planning gain provides about 1 billion of extra funds for local authorities during the year, but the fact is that local authorities are spending far more to develop the infrastructure, particularly the transport that is necessary for these services. The consultation document is there for people to see, and the Conservative party would be wise to consider the issues before it makes a wrong decision once again.

George Mudie: As we are facing one of the worst winters for many years, I congratulate the Chancellor on providing 300 million for central heating for pensioners on pension credit. I also congratulate him on the new initiative to provide an additional 300 million subsidy for private sector pensioners to install central heating. Will he assure the House that he will keep those figures under review and ensure that that excellent initiative continues in future years and future programmes?

Gordon Brown: My hon. Friend takes a big interest in the needs of both pensioners and people without high resources in the communities of this country. I hope that the insulation and central heating scheme receives all-party support. It is a scandal that as we face the winter months, large numbers of pensioners are unable to afford either insulation to cut their heating bills or central heating, which is why the measure is open to all pensioner householders and is not restricted to one group of pensioners. Where pensioner households do not have central heating, it is possible to obtain a 300 grant to install central heating, starting immediately. Equally, where pensioner households do not have insulation, the energy companiesI am really grateful to them for what they have proposed todaywill offer between 125 and 175 towards the cost of insulation. As I have said, I hope that the measure receives all-party support. We face cold winter months, so the sooner that pensioners can access the scheme, the better.

Damian Green: International competitiveness is one of the things that the Chancellor glossed over in his statement. In its latest annual report, the Treasury has produced a helpful table based on the World Economic Forum international competitiveness league. During the right hon. Gentleman's time as Chancellor, Britain has slipped from fourth to 13th in that leaguewhy?

Gordon Brown: If the hon. Gentleman examines the different leagues for competitiveness, productivity, stability, efficiency and regulation, we are doing very well. [Interruption.] If Conservative Members look at the figures, they will see that we are ahead of Germany and Japan in productivity, and we are catching up with France. Yes, we are behind America, but the measures that we are proposing are designed to enable us to catch up. In 1997, when we came into power, we had the lowest GDP per head in the G7, but now it is the third highest. It is important to look at all the different comparisons, and Conservative Members will be particularly interested in one of them: the Heritage Foundation, which is one of the more right-wing institutes in the United States, has stated that in terms of economic liberalism, deregulation and flexibility of the economy, we are better placed in the rankings than when the Conservative party was in power.

Adrian Bailey: I welcome the Chancellor's announcement of the shared-equity scheme. Does he agree that areas such as my black country constituency, which historically contains low incomes and a lot of brownfield sites, could particularly benefit from the scheme? Will he also ensure that local authorities are involved in the dialogue between banks, building societies, developers and the Government? Young people who are searching for accommodation often make the local authority their first port of call, and local authorities have an important part to play in assessing the need and potential for the scheme in areas such as mine.

Gordon Brown: I am grateful to my hon. Friend and will talk to him about the expansion of shared-equity schemes and how they will affect his constituency. We clearly need to do more on social housing, too. We need to build more housing for rent and make it possible for the pilots on disused sites to be successful in different areas of the country. I regard the shared-equity scheme as one of the most exciting developments in recent years. The fact that the building societies, building companies, investment companies and, potentially, housing associations are all examining how they can develop shared equity is an important development for our economy.
	Today, I visited the home of someone who could not afford to buy a flat in London if they had to obtain a 100 per cent. mortgage. They have got a 40 per cent. mortgagethe rest is covered by a rent agreementand can move into their first flat, which they will do before Christmas. Many thousands of people throughout the country depend on the development of shared-equity schemes to have a chance to get on to the first rung of the housing ladder. We are determined to work towards making shared-equity schemes happen as quickly as possible and, again, I hope that the measure receives all-party support.

Nigel Dodds: I, too, welcome the Chancellor's statement on tackling fuel poverty, especially among the elderly. It is a scandal that in this day and age people still have to choose between heating and eating. Given the levels of fuel poverty in my constituency and in Northern Ireland generally, can the Chancellor confirm that the measures that he announcedwelcome as they are, and which I hope will be uprated year on yearwill apply to Northern Ireland?

Gordon Brown: That is what the discussion will be about. Funds have been allocated for Northern Ireland. I hope that that means that insulation and central heating programmes will move ahead. I am determined, over the next few months, to ensure that as much as possible is done to insulate and to provide the necessary central heating. As the hon. Gentleman says, it is a scandal that in this day and age too many pensioners feel unable to provide the heating that is necessary for the warmth that they need, and we must take this new initiative to make it possible for them to have it.

Local Government Finance

Phil Woolas: With permission, Mr. Speaker, I should like to make a statement about local authority revenue finance for England in 200607 and 200708.
	Sensible planning for service delivery needs a stable and predictable funding environment. Freezes on grant distribution changes have helped, but the time has come to go further and give councils firm forward financial allocations. There is no reason why councils cannot now provide similar certainty for their local taxpayers when setting their council tax for 200607 by providing an indicative council tax for 200708.
	To give councils as complete a picture as possible of forward financial allocations, I am today announcing, for the two years 200607 and 200708, allocations of formula grant and grant for the Supporting People programme. The Government will also publish, by local authority, a table of allocations of all the major revenue grants that can be allocated in advance, including the neighbourhood renewal fund, which gives indicative allocations of 525 million for 200607 and 525 million for 200708 for the 86 most deprived local authority areas in England. By the end of this week, we expect that the vast majority of individual specific grant allocations will be announced to local authorities. The only grants that cannot be announced at this stage will be performance-led or data-driven in their nature.
	My right hon. Friend the Minister for Schools will shortly announce the provisional allocations to authorities of dedicated schools grant. Hon. Members should bear in mind that those allocations need to be added to those that I am announcing today to give a fuller picture of the above-inflation funding going to authorities with education and social services responsibilities. With the next spending review period, we will move to give three years of grant allocations to local government.
	It is also high time that we overhauled the system that we use to distribute the formula grant. For more than 20 years, successive Governments have used a system based on notional figures for spending and local taxation. In the 1990s, the Government described the old standard spending assessments as
	intended to represent the amount which it would be appropriate for the receiving authority to calculate as its budget requirement.
	We no longer take that view. The formula is simply a means of distributing Government grant. Notional spending and taxation figures none the less continue to be misunderstood and misused for a variety of purposes, such as spending or tax targets, for which they were neither intended nor suitable. Such notional figures get in the way of sensible budget setting, because councils treat them as targets or going rates, and of a more mature relationship with local government on doing business together. I propose a system that deals in honest currencycash grantnot fanciful assumptions about spending.
	I accept that most responses to the consultation were against our proposal along those lines. However, the arguments supporting that position were not strong. Many stated that the new system would be more complex or use more judgment than the existing system; neither is the case. The new system will retain the strengths of the old. It will continue to take account of the relative needs of an area and the relative ability of councils' areas to raise council tax. There will be an element of grant that is distributed on a per capita basis and a grant floor.
	Total revenue grants to English local authorities will be 62.1 billion in 200607 and 65.1 billion in 200708increases over the previous year of 4.5 per cent. and 5 per cent. respectively. Part of that increase is dedicated funding for schools, leaving formula grant for other services that will total 24.8 billion in 200607 and 25.6 billion in 200708increases of 3 per cent. and 3.8 per cent. respectively. That means that, by 200708, the increase in Government grant for local services since we took office will be 39 per cent. in real terms.
	We have been working with local government over the past three years on possible changes to grant distribution formulae. We consulted publicly over the summer and I am publishing the summary of consultation responses today. Following that consultation, we propose several changes. The main drivers behind the change that I propose are: updating, especially the use of 2001 census data in place of that from the 1991 census; making the system more forward looking by using projections of population and council tax base; and adapting to policy change.
	The new formulae for personal social services for children and younger adults are based on extensive research and have a solid evidence base. That makes it clear that there will need to be substantial change to reflect the evidence on service provision and the very different social and demographic environment of the 2001 census. The grant system also takes account of councils' widely varying ability to raise council tax, depending on the council tax valuations of housing in their areas. We propose to increase that resource equalisation because that will make the system fairer for those authorities with relatively low ability to raise council tax locally.
	I propose to adjust the grant distribution system to reflect the introduction of free off-peak bus travel for the over-60s and the disabled from next April. I shall do so by increasing the weightings in the district level environmental, protective and cultural services formula that are given to factors that reflect support for the disabled and the needs of areas where take-up is likely to be highest.
	Grant floorsthe minimum guaranteed increase from one year to the nextare a permanent part of the system. Given the importance that we attach to stability and predictability of grant, we shall phase in the larger changes this year with more than usual care. The changes in children's social services and younger adults' social services will be phased in with specific formula floors. On top of that, we propose grant floors for groups of authorities.
	For 200607, the floors will be as follows: for authorities with education and social services responsibilities, 2.0 per cent.that figure excludes the increase in schools funding, which will give all such authorities above-inflation increases in grant; for police authorities, 3.2 per cent.; for fire and rescue authorities, 1.5 per cent.that figure masks the help we are giving those authorities by phasing in recovery of the modernisation grant paid in 200405; and for shire district authorities, 3 per cent. For 200708, the floors will be as follows: for authorities with education and social services responsibilities, 2.7 per cent.; for police authorities, 3.7 per cent.; for fire and rescue authorities, 2.7 per cent.; and for shire district authorities, 2.7 per cent.
	Within each group of authorities, those above the floor will have their grant increase scaled back to pay for the floor. The floor levels that I propose will mean that there will be a fairly narrow range of grant increases in 200607, with police authorities in particular all receiving approximately the average increase. For 200708, all authorities will receive a grant increase at least in line with inflation, and more formula change will come through for most authorities.
	I would now like to come to the Supporting People programme, which was introduced in 2003 and is successfully providing support to more than 1.2 million vulnerable people. I am pleased to announce a two-year settlement for this programme. The Supporting People grant allocation for 200607 will be 1.685 billion, which is a significant investment, and I have also announced guaranteed minimum allocations for 200708 to enable authorities to plan their expenditure. Further, I am pleased to announce that authorities will be able to roll forward any savings from 200506 to 200607 in order to reinvest in the programme. This announcement will bring stability to the sector and enable authorities to work with support providers and voluntary sector and community groups to plan for the future. Building on the success of the Supporting People programme, I recently launched a consultation on how the programme can be further improved. Following that consultation, I will announce the full allocations for 200708 next summer.
	This settlement is good news for councils and for council tax payers. We have been working closely with local authorities this year to identify the extent of the pressures that they face up to 200708, and we consider these actions necessary to mitigate those pressures. I am pleased to announce extra formula grant for the two years over and above previous plans of 305 million and 508 million for local government. We have also agreed with local government that we will jointly move forward on a number of fronts aimed at addressing the real pressures that councils face. This includes a continued commitment to the new burdens procedure, working with local government to assess the costs and savings of implementing new polices, and funding the net costs. We will be strengthening the mechanisms to enforce the new burdens procedure. Further, I announced to the House on Friday the agreement that the cost pressures arising from the temporary reinstatement of the 85-year rule in the local government pension scheme will not fall on taxpayers.
	We are also aware of authorities' concerns over the costs of the new licensing scheme. I am pleased that we have been able to reassure the Local Government Association on this issue. The Minister with responsibility for creative industries and tourism has today reaffirmed the Government's commitment that the cost to local authorities of meeting the requirements of the Licensing Act 2003 will be fully met by fees within the national fee regime, provided, of course, that they are incurred legitimately and efficiently.
	Local authorities will also benefit from the extra money coming in to local authority budgets through the local authority business growth incentive scheme, and from the new top-up grants for police and fire and rescue pensions, which will help budget planning and, ultimately, the council tax payer.
	We have provided a stable and predictable funding basis for local services and we expect local government to respond positively on council tax. We therefore expect to see average council tax increases in each of the next two years of less than 5 per cent. Following today's announcement, there will be no excuse for excessive increases. Local government should be under no illusionsif there are excessive increases, we will take capping action, as we have done over the past two years.
	I am also announcing today consultation on alternative notional amounts. The draft alternative notional amounts report sets out the proposed notional adjustments to local authorities 200506 budget requirements to help enable like-for-like comparisons with 200607 budget requirements for capping purposes. That is being issued for consultation today to ensure that authorities know, in advance of setting their budgets, the budget requirement figure for 200506 that the Government will use when considering using our capping powers.
	The Government have provided another significant boost to local authorities with a financial package that is stable, predictable and adequate to meet the pressures that local authorities face over the next two years, while keeping down council tax increases to acceptable levels. I have placed copies of tables giving grant allocations and supporting documentation in the Vote Office and the Library of the House, and full details are being made available for local authorities on our website. I look forward to receiving consultation responses, and I commend these proposals to the House.

Eric Pickles: I thank the Minister for early sight of his statement, and particularly of the supporting documents. It has been a good and worthy tradition that we get plenty of time to respond to this particular statement, and it is partly due to him giving me so much information that I missed the first 15 seconds of his statement. No disrespect was intended.
	I welcome the move towards a three-year programme and settlement, which is extremely sensible, and the Opposition support the Government in their aim to achieve that in the long term.
	About a month ago, we were regaled with headlines in the national press suggesting that the hon. Gentleman and his friends in the Department were wandering around Whitehall with a begging bowl for local government, as previous settlements had proved to be inadequate. That followed the same practice last year. The House will recall the views last year of a senior and, sadly, anonymous mandarin, who, when asked to spare additional funds for the hon. Gentleman's Department, told the asking official to vacate his office as expeditiously as possible. To emphasise the point, the mandarin preferred to use the shorter Anglo-Saxon version of that request, and it seems that the spirit and the gesture remain firmly embedded in this settlement.
	We were told that this year things would be different. We were told that the one-off bung of 1.4 billion would be added permanently to the local government settlement. It now looks like a 2 billion bung over two years. It was a settlement and then an amendment, but it need not be so. In the pre-panto season, we were promised a Robin Hood settlement in which hard-pressed local authorities would receive resources to do their job properly. On examination of the hon. Gentleman's statement, it is clear that the settlement would not please Robin Hood, but would find considerable favour with Guy of Gisborne, chief torturer to the sheriff of Nottingham.
	The settlement envisages an increase in council tax of twice the rate of inflation. This year, council tax payers will see their bills approach an 80 per cent. hike since Labour came to office. Will the hon. Gentleman confirm that the small print in the Chancellor's pre-Budget report, on page 229, reveals that council tax receipts are forecast to rocket by a massive 7.1 per cent.an extra 1.5 billion snatched from hard-working families and pensioners? That is an intolerable burden, particularly at a time when the Government have allowed a shameful drop in the take-up of council tax benefit.
	Next year, like this year, we will see the sad parade of old-age pensioners being threatened with jail. Next year, like this year, we will see significant cuts in services by councils trying to keep their tax increases to as reasonable a level as possible. Next year, like this year, we will see that the optimism of the Minister's statement, as council budget meetings are held, will prove to be a false hope and a bitter reality.
	Last year, we were promised that Sir Michael Lyons would have reported on this year's settlement. In October, we were promised an interim report this autumn. In today's pre-Budget statement, there was not a mention of that interim report. When will we receive it? Will it be before Christmas, after Christmas or in the early spring?[Interruption.] It seems that the Minister of Communities and Local Government suggests early spring. It is no use to talk about an increase in funding without talking also about an increase in burden. The Minister's predecessor, the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), who I am pleased to see in his usual place, became a late convert when addressing this problem. Some of the right hon. Gentleman's handiwork can be detected in the statement, and I am sure that many councillors will be grateful for that.
	I understand that there will be a written statement today from the Secretary of State for Culture, Media and Sport on the levels of licence fees that a local authority can charge. I understand also that there will still be a lack of clarity on the level of costs that local authorities face. Will the Minister give an undertaking that local authority taxpayers will not have to fund any part of the burden? How will the Government ensure that the full start-up costs or new licensing burdens on local authorities will be fully met? In particular, how will the cost of appeals be fully met?
	Last year, the Chancellor of the Exchequer announced a discretionary fare scheme for pensioners. The Minister will recall that I raised the problem of floor authorities, which he has mentioned. These are authorities that are in the process of losing grant across the board. Each year their losses are limited to the amount that is specified for the floor.
	If the money designated for concessionary fares was simply included in the floor calculations, many district councils would effectively receive nothing for concessionary fares. Will the Minister clarify the position? Will he confirm that the 200 pensioners' discount was a pre-election, one-year wonder and has now disappeared? Were not the promises made to pensioners by the Government of a 200 discount on their council tax merely a simple one-year pre-election bribe? Will he further confirm that that has now gone? The Deputy Prime Minister tabled an order bearing on the local authority pension scheme. It is identical to the one submitted, only to be withdrawn, a year ago. That created a unique double U-turn, separated only by a general election.
	We have heard about the 85-year-old rule, but what of the rest? Can the Minister give an assurance that no part of the burden of the Government's change of approach to the local government pension scheme will fall on council tax payers?
	The Government, against the wishes of the public, are seeking to impose a regional police force. Will the Minister give an indication of how large the increase is expected to be on the police precept to pay for the rearrangement of the furniture in police headquarters? Does he recognise that the money would have been better spent on catching criminals rather than wasting it on Powerpoint presentations at headquarters?
	There is the issue of external finance. The new planning gain supplement is nothing more than a new Labour land tax and, just like the old Labour land tax, it will fail. No doubt the House will have an opportunity to debate the issue in some detail. However, I have a few questions about the financial division of the tax. How will it be divided between the Government, the regions and local councils? It looks like a rip-off by the regions. Given that it is to be collected by HM Revenue and Customs, can we be sure that there will be a return to local people? It has the appearance of another stealth tax.
	Given that there is a fragile housing market, is the Minister worried that, perversely, the approach might dry up housing developments? As for London, does the increase include the Olympic precept? What protection is there from the excessive city hall demands by Mayor Livingstone on the people of London?
	The council tax is now in deep trouble. There is no sign of it coming out of intensive care. It is kept going by whip-rounds and the odd bone from the Chancellor of the Exchequer. It is not a strategy for independent living; it is a recipe for delay in the hope that something will turn up or that Ministers will move on to a new job. There will be another year with bills going through the roof; another year with increases that are twice the rate of inflation; another year with the council tax being Labour's stealth tax. The Government have yet again let down the people.

Phil Woolas: I believe that the contribution of the hon. Member for Brentwood and Ongar (Mr. Pickles) has left the House in some confusion. I am not sure whether he welcomes the extra money that will enable council taxes to be kept down, or whether he is privately gritting his teeth so greatly as to rattle his fillings with anguish at the rug being pulled from under his feet. His authority in Brentwood will receive 3.1 per cent. and 2.7 per cent. increases, while in Epping Forest, which I believe forms part of his constituency, the increases will be 9 per cent. and 6.1 per cent.

Eric Pickles: What about pensioners?

Phil Woolas: I intend to tell the hon. Gentleman about pensioners. First, let me say that I am grateful for his welcome for the two-year settlement, andI think that he said this as wellfor the indication of our intention to move towards three-year settlements in line with the spending review periods. Our policy is to provide predictability and stability for funding, so that local authorities and their partners can deliver services at stable council tax levels.
	I reject the hon. Gentleman's interpretation of the 7.1 per cent. figure. This hoary old chestnut comes up every year, and is based on regressive estimates of council tax receipt. Again, the hon. Gentleman seems to be seeking to sow confusionI do not say that he is doing so intentionally, although I have my own viewsabout the differences between council tax yield and council tax levels. The two are, of course, entirely different.
	The hon. Gentleman said again that OAPs had been threatened with jail. Let me repeat, for the benefit of the House and the honourable ladies and gentlemen from the press, that no pensioner has been or will be jailed for not being able to pay council tax. There have been two instances this year of pensioners' receiving prison terms for being unwilling to pay the tax. I am surprised that the hon. Gentleman and his party should seem to seek to promote the idea that those who are unwilling to pay taxes should not do so. It is, of course, the hard-working, honest majority who suffer. [Interruption.] I am coming to the point about which the hon. Gentleman is shouting at me from a sedentary position. He asked 17 questions; 13 of them made sense, so I shall answer those.
	I covered the hon. Gentleman's serious point about licensing fees in my statement. The written statement today from the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Stalybridge and Hyde (James Purnell), the Minister who is responsible for creative industries and tourism, confirms that the system will be self-funding under the new licensing regime.
	The hon. Gentleman talked about the 200 discount that was announced in this year's Budgetin the last financial year, but the current calendar year. I am sure he will join me in welcoming the fact that, as we speak, cheques for 200 are arriving on the doormats of his constituents. I note that his party is very silent on the policy for the future.
	A statement on the local government pension scheme was laid before the House on Friday. The hon. Gentleman accused the Government of a double U-turn, but I can give him the assurance that he seeks. The scheme is funded, and the changes proposed following discussions between employers and employees will impose no extra burden on the taxpayer.
	The hon. Gentleman asked about planning gain supplement. I can reassure him that the money is to pay for infrastructure, as requested constantly and sometimes reasonably by Opposition Members for their constituencies, and that the majority will go straight to the local area. That which is regional is, of course, for the local area, if the funding stream must inevitably be at a higher level.
	I confirm that the precept for the Olympics is not included in the figures that I have given today. In answer to the hon. Gentleman's proposition that the council tax is in deep trouble, it is his policy that is in deep trouble. The predictability, the stability of funding and the extra money that is being provided following reasonable discussions with the Local Government Association mean that the Government will not tolerate excessive increases. We see no reason now why council tax increases should be above 5 per cent. Indeed, average increases could be well below that.

Nick Raynsford: I congratulate my hon. Friend and his colleagues on securing additional funding to that provided for in the provisional settlement, which means that this is a better settlement than was anticipated. However, I do not think that he would ignore the fact that it is a tight settlement, with increases on average for education and social services authorities, excluding the dedicated schools budget, of only 3 per cent. this year, and in London of only 2.5 per cent. If I read the figures correctly, the increase is only 2.5 per cent. for my own authority, while Rutland, curiously, secures the best settlement of all education and social services authoritiesa 6.8 per cent. increase. Does my hon. Friend feel that that reflects the aim of ensuring the targeting of resources on those in the greatest need?

Phil Woolas: I welcome my right hon. Friend's contribution, given his deep and extensive knowledge of the system. One of the other reasons that Opposition Members are grating their teeth is that today's announcement scuppers the suggestion that there is a bias in the settlement against the south-east. The Government do not follow that policy; they have a fair policy. I warn my right hon. Friend that one has to look at the amended tables to ensure that we are comparing like with like, but I believe that we have provided a very fair settlement to authorities throughout the country and to different types of local authorities.

Mark Hunter: I thank the Minister for his statement. It is a pleasure for me to make my first contribution from the Front Bench on this subject, having spent the best part of the past 20 years in local government and as someone who still passionately believes in the case for local government.
	It is interesting to see in today's statement the contortions that the Government are going through again to lay the blame for council tax rises squarely at the feet of local authorities. Let me remind the House that it is not local government's fault that Labour has failed to introduce a decent funding system for councils, just as it is not local government's fault that the only way in which it can raise money is through the abysmally unfair and unpopular council tax.
	Today, we have another one-off bung, although this year it will fall well short of filling the black hole that councils face, which according to LGA estimates could still be the best part of 2 billion. Will the Minister confirm that this is the third one-off grant in as many years? Perhaps he should consider renaming it an annual grant. Whatever we call it, though, the sad fact is that it will not be enough.
	To fill the gap, councils would need to raise council tax by around 8 per cent. Of course, the statement has shown that such rises will not be permitted, thanks to the capping rules that were announced today. The planned cap of 5 per cent., far above inflation, does nothing to alleviate the problems for people who already struggle to pay their council tax billsnothing will, frankly, except the abolition of council tax itself. Of course, the cap is an affront to local democracy. Perhaps the Minister will explain why Labour, which has boasted of its achievement in ending the Tories' crude and universal capping mechanism, now sees fit to introduce a two-year capping regime that is both crude and universal in itself.
	Is the Minister aware that, thanks to the combination of spending pressures, tight grantsthe right hon. Member for Greenwich and Woolwich (Mr. Raynsford) described this settlement as tightand no freedom on council tax, councils will once again be forced to cut services? Did the Minister read the social exclusion unit's report, Improving Services, Improving Lives, which concluded that the quality of services provided by local government is fundamental to tackling social exclusion? Is he not therefore concerned that this settlement, combined with absolute restrictions on council tax rises, will force cuts in services? It is likely to worsen social exclusion. After all, cuts will not be easy to come by in many local authorities; councils are already striving to be ever more efficient. Is he aware that councils are producing 58 million-worth of efficiency savings every monthmore than any other sector of government? Why, therefore, are they not believed when they speak of spending pressures?
	The Minister has been quick to dismiss the LGA's assessment of spending pressures, but it personally surveys every local authority's finance department; the Office of the Deputy Prime Minister does not. Does the Minister think it wise to scoff at the LGA's estimates, given that the ODPM makes so little effort to establish the situation on the ground? Will he now acknowledge that the LGA is indeed right to warn of a black hole of some 2 billion? For the benefit of councils struggling to balance next year's budget, perhaps he can tell the House where precisely he would like services to be cut. Would he prefer a reduction in care for the elderly or cuts in children's social services; or would he like the streets to be left littered with rubbish and graffiti?
	As we are all too well aware, Sir Michael Lyons is conducting a review of local government and local government finance. Enjoyable though it may be

Eric Martlew: On a point of order, Mr. Deputy Speaker. Is this a question to the Minister or a speech?

Mr. Deputy Speaker: Order. I think that the hon. Gentleman can safely leave these matters to the Chair. The Minister will have detected questions here and there.

Mark Hunter: You are very kind, Mr. Deputy Speaker.
	Enjoyable though it may be for us to assemble here every yearwith the eyes of local council employees, fearful for their jobs and their futures, on uswe Liberal Democrats hope that Lyons will bring an end to this whole sorry charade. Why do we put up with the most centralised and antiquated local government finance system in Europe? Why do the Government ignore all the evidence that demonstrates that the system is failing the people of this country? Given that local government is raising only 25 per cent. of its revenue, and given that it is not even allowed to make decisions about that 25 per cent., this grant statement is councils' only hope of securing adequate resources to serve their communities.
	An out-of-date statistic here or a change in Whitehall priorities there can cost councils dearly. Just last year, my own council of Stockport

Mr. Deputy Speaker: Order. I am reluctant to stop the hon. Gentleman during his first attempt at such questioning, but he has said enough for the Minister to respond to.

Phil Woolas: I congratulate the hon. Gentleman on his appointment to the Liberal Democrat Front Bench and on his contribution. I suspect, however, that the Focus leaflet was written irrespective of what I announced today. Against the background of a now 39 per cent. increase in real-terms Government grant to local authorities, it is not credibleand taxpayers know itto paint the picture that the hon. Gentleman has attempted to paint. I suspect that, rather like the hon. Member for Brentwood and Ongar (Mr. Pickles), the Liberal Democrats feel the rug being pulled from underneath them, given the fair settlement that has been announced today and its two-year nature.
	The Local Government Association's claim of a 2.2 billion shortfall has now been revised downwards, following sensible and mature discussions with the association, which is led by a very able Conservative leader. The figures have been revised, discussed and analysed, and we have a joint programme of action to pay the fair extra burdens, under the policy introduced by my right hon. Friends the Member for Greenwich and Woolwich (Mr. Raynsford) and the Deputy Prime Minister. If local authorities face genuine extra cost pressures, we have a joint strategy to address those costs, which contrasts with the yah-boo approach of the Liberal Democrats to criticise and blame every problem in local authorities on the Government, while at the same time calling for further devolution. I suspect that the Focus editor is at his or her word processor as we speak, making amendments.

Frank Field: I thank my hon. Friend the Minister for the amount of time that he spent with Councillor George Davies and other senior councillors from the Wirral as they expressed the injustice that they feel over the level of Government support. My hon. Friend will know from those conversations that a particular concern for the Wirral is the level of support for social services. To what extent has his statement today made good the injustice that we feel about the level of support we receive from the Government compared with that received by comparable local authorities in the south-east?

Phil Woolas: I know that my right hon. Friend has taken a close personal interest in that matter, and especially in the Supporting People budget. Several representations have been made on that issue. I may be able to give him some reassurance, because his authority is looking at increases above the floor level, and it is also in receipt of neighbourhood renewal funds and allocations for Supporting People. I look forward to the response from his local authority when it has studied the details of the figures.

John Redwood: Given that the Chancellor's figures show that more than 7 per cent. extra will be collected in council tax this year, would not the Minister have been better advised to have listened to the strong representations from local government that it was not a good idea to ring-fence, in a separated grant, the amount of money for schools? Would it not be much easier for authorities to make their own decisions about priorities between schools and social services, which are the two main areas of spending? Is the Minister really saying that schools are always more important than social services? Is he saying that he thinks that councils can keep council tax down when they have their hands tied behind their back by requirements from the Government to spend certain sums in certain areas?

Phil Woolas: The right hon. Gentleman would have a point were it not for the fact that, as I announced in the statement, we now have a floor for education and social services functions for local authorities. That will be widely welcomed by local authorities across the country and across the political spectrum. I am sure that when the right hon. Gentleman studies the figures for his area,   which show above-inflation increases andby 200708an average increase in formula grant over 10 years of some 5.2 per cent. in Wokingham and 5.1 per cent. in West Berkshire, he will feel able to welcome the announcement that we have made.

Clive Efford: My hon. Friend has received many representations about area cost adjustment. What is his attitude to the geographical spread of area cost adjustment in the light of those representations?

Phil Woolas: The current area cost adjustment, which was introduced in 200304, is generally regarded as a considerable improvement on its predecessor, and I pay tribute to my predecessor for that. Of course, the ACA is a national funding formula and any changes to it must be nationally applicable. We have taken the opportunity of the review of the ACA to implement some minor updates, simplifications and improvements. However, I recognise the real concerns felt in different types of local authority areas, and I will look again at the geography of the ACA.

Tony Baldry: Banbury young homelessness project is quite likely to close as a result of the Government's severe cuts to the Supporting People programme in Oxfordshire: a cut of 2.5 million next year, 3.5 million the year after and over the next 15 years to 11 million in year 15a cumulative cut of 106 million. The consultation paper that the Minister issued in no way mitigates those reductions in the Supporting People projects in Oxfordshire. Those are real cuts for vulnerable peoplethose with learning difficulties, the homeless and othersand the Minister does not seem to be listening to the united representations of all parties and MPs in Oxfordshire, including his colleague the right hon. Member for Oxford, East (Mr. Smith) and the hon. Member for Oxford, West and Abingdon (Dr. Harris). When the Minister considers the Supporting People budget, will he look again at his consultation paper to ensure that counties such as Oxfordshire do not suffer those severe cuts and that valuable projects such as the Banbury young homelessness project can continue?

Phil Woolas: I am of course aware of the strength of feeling and that an all-party delegation made representations on the issue. It is in part due to that that I very much wanted to be able to make guaranteed minimum allocationsand they are minimum allocationsfor 200708, to ensure that counties such as the hon. Gentleman's could plan with some certainty. That is of course not the end of the story. The allocations of the 200708 Supporting People budget will, as I said in my statement, be subject to both the consultation currently taking place on the overall strategy and further announcements in the course of next year.

David Clelland: I welcome the extra measures that the Minister has announced to assist local authorities with the introduction of new free off-peak bus travel schemes from next April. I thank him for the sympathetic way in which he listened to those of us who lobbied him on the matter over the past few months. Will he assure the House that the measures he has announced today will ensure that no local authority will have either to increase council tax or to cut services in order to introduce the new system, and that no eligible traveller will pay more after its introduction than they do at present?

Phil Woolas: In the run-up to the settlement, there have been several representations from authorities across the country, including my hon. Friend's transport authority. The measures that I announced today reflect a change in the proposed formula for allocations, especially in areas where there is high usage by pensioners and disabled people. I am sure that my hon. Friend will recognise that the change has been made in response to representations from both sides of the House, and I look forward to pensioners benefiting from free bus travel in his area.

Desmond Swayne: The Minister said that he was keen to look again at the geography of the area cost adjustment. Well, will he look at minebecause he also said that he wanted greater reliance on and greater scope for resource equalisation, which means that my constituents, for whom, in effect, no account is taken of the higher costs associated with Hampshire, are expected to pay for services not in the New Forest but, increasingly, in places such as Durham? That is behind their increasing unwillingness to pay up.

David Miliband: What is wrong with Durham?

Phil Woolas: I think the hon. Member for New Forest, West (Mr. Swayne) suspects that they are all poor up north.
	In answer to the charge that has been made, the serious point is that resource equalisation is not the method by which the funding formula compensates authorities for the income, and relative income, of people in local authority areas. It is the measure in the formula whereby we take account of the type and spread of houses in the local authority area. When the hon. Gentleman gets the opportunity to look at the figures, he will see that in Hampshire there has been a 2 per cent. and 2.7 per cent. increase and that in his constituency of New Forest

John Bercow: West.

Phil Woolas: East and Westit is all one council. There will be a 4.7 per cent. increase for the council in both years. I hope that the hon. Member for New Forest, West will issue a statement to his local paper welcoming the fairness of the settlement.

Eric Martlew: On the excellent free off-peak bus travel scheme for the over-60s and the disabled, my hon. Friend will realise that the Department's initial draft was not favourable to Carlisle. He has received representations from the chief executive, and I have had conversations with him. Can we take it from the statement today that the problems that we had with the draft have been sorted out and that the good people of Carlisle will all be able to enjoy that service free?

Phil Woolas: It is, of course, the Government's intention to ensure that that is exactly the case. It is in the nature of grant allocations using formulae that the proof of the pudding is in the eating. That is why I have made the announcement in the manner that I have today, so that all local authorities can join one anotherparticularly at district level in county schemes, as well as in strategic transport authoritiesand the Government to ensure that we achieve what I hope we all want to achieve: free bus travel for pensioners and disabled people outside peak hours.

John Pugh: Can we take another run at the concessionary travel issue, because I am not sure that the House is clear about it? Can the Minister say whether any part of the cost of the Chancellor's pre-election promise of free concessionary travel for pensioners now falls on any council tax payer, or is that completely funded by additional grant?

Phil Woolas: The Chancellor has allocated 350 million, which is adequate to cover the costs of the concessionary scheme, as is recognised by all parties concerned. The hon. Gentleman is shaking his head, but the hon. Member for Cheadle (Mark Hunter) criticised me a moment ago with the allegation of centralising and taking powers. The hon. Gentleman can either have devolution or not. If he wants the concessionary fare system to workI know that he doesI hope that he supports my attempt to implement that policy using the formula grant rather than a centralised grant, which is, of course, the alternative.

Neil Turner: I welcome the increase in the resource allocation equalisation element, which is partly intended to ensure that local authorities such as mine that would suffer because of the lack of the revaluation will be compensated somehow, but I doubt very much whether it will fully compensate them. Will my hon. Friend ensure that the neighbourhood renewal fund is extended at least until the Lyons review is implemented? Will he also ensure that the cap on that fund comes off, so that authorities such as mine will get the full amount that they are entitled to under the formula, rather than the reduced amount that they get at the moment?

Phil Woolas: I thank my hon. Friend for his support. For the benefit of the House, I should say that the move towards full resource equalisation has been taken because it appeared to my right hon. Friends and me to be the sensible way to implement the new system, particularly given the announcement of the abolition of the formula spending share, which has been criticised by some local authorities.
	My hon. Friend's authorityWigan metropolitan borough, which is rated as an excellent authority by the independent Audit Commissionwill receive grant increases of 2.3 per cent. next year and 3.8 per cent. the following year and neighbourhood renewal funds of 4.1 million for 200607. That fund is, of course, subject to a transitional relief scheme whereby, as areas become more prosperous under the scheme, the funding is tapered away.

Geoffrey Clifton-Brown: The Minister's announcement of a two-year settlement is to be welcomed if it is a good one; of course, if it is a bad one, it merely prolongs the agony for a further year. In that connection, Gloucestershire's fire and police settlements look particularly challenging. In Gloucestershire, our fire service has already been regionalised and our police force is about to be merged. No doubt, that will be followed by the Crown Prosecution Service, the probation service and the youth offending service. Will the Minister give us an absolute assurance today that, if the savings from those mergers do not occurin fact, if there is a costnone of the costs of those mergers will accrue to the council tax payers of Gloucestershire?

Phil Woolas: The proposals on police authorities, which are under consultation, are driven by the policy of improving the effectiveness and efficiency of police authorities. However, I can reassure the hon. Gentleman, because the floor level announced for next year for the fire and rescue service of 1.5 per cent. must be viewed in conjunction with the generous approach that we have taken on the repayment of modernisation fund money. Additionally, new arrangements for fire and police authorities for paying pensionsthe scheme for each is unfundedhave been devised in such a way as to benefit those authorities, so I expect that they will be widely welcomed. Before the hon. Gentleman draws his conclusions, I would ask him to read the small print, although I am not accusing him of not doing so.

Margaret Moran: I welcome the increase of 5.2 per cent. in grant formula for Luton council up to 2007 and the stability that the Minister is offering. I understand that this is the eighth consecutive year in which we have received an inflation or inflation-plus settlement for local authorities. However, is he aware that Liberal-Tory Luton council has already indicated that it will make swingeing cuts to social services on the basis of anticipated Government grant cuts, thus ending day care to the elderly and all but the most acute social services? Will he clarify that that is not necessary and investigate Liberal-Tory Luton, the financial mismanagement of which appears to be putting the most vulnerable in jeopardy?

Phil Woolas: I thank my hon. Friend for her contribution. Proposals that are put forward on the basis of formulae that have not been consulted on are not real proposals. I sometimes think that those who advocate opposition to the formulae on which there has been consultation are the same people who ask for more consultation. Perhaps in this area, if not in others, we are damned if we do and damned if we do not.
	I can give my hon. Friend the reassurance for which she asks. The proposed net increase in the 200607 formula grant for Luton is 2.8 per cent. The figure is 5.2 per cent. for South Bedfordshire council and 2 per cent. for Bedfordshire council. In the following year, the figure for Luton will be 4.9 per cent., and it will be 4.6 per cent. and 2.7 per cent. for South Bedfordshire and Bedfordshire councils respectively.

Philip Hollobone: I declare an interest as a member of Kettering borough council. Is the Minister aware of the special situation that faces Northamptonshire, given that it is the county that faces the highest proportionate increase in its population as a result of the Government's growth area agenda? Will he advise the House whichand whosepopulation projections have been used by the Registrar General? The brief look that I have had at the document that has been produced today suggests to me that the Registrar General is rather underestimating the population increase in the county.

Phil Woolas: I thank the hon. Gentleman for his question and acknowledge readily that he has taken a close interest in the matter on behalf of his area through his participation in debates. I point him to the proposals on the use of population statistics that have been announced today. In the past there was simply a regressive look at population, but there is now a balance between historical growth and future projections. I am more than happy to look into the detail of his point, but I think that the Government should be given support and praise today for the acknowledgement that we have madeboth in the pre-Budget report of my right hon. Friend the Chancellor and the local council settlementof growth area demands, which, incidentally, exist throughout the country.

Emily Thornberry: In addition to the grant floor for different local authority types, will my hon. Friend explain further what he means by phasing of social services?

Phil Woolas: I thank my hon. Friend for that question, which will be important to her constituents and people throughout London. I have announced today that in addition to the floor that is provided to give stability to different types of local authorities throughout the country, social services will themselves be subject to a floor of 2.7 per cent. in both the young people and adult formulae. As I said in my statement, the floor is a permanent part of the local government formula.

Orders of the Day
	  
	Work and Families Bill

Order for Second Reading read.

Alan Johnson: I beg to move, That the Bill be now read a Second time.
	This Government back Britain's families and back Britain's businesses. Those aims are not mutually exclusive, but mutually supportive. Flexible working raises employment levels for our economy, widens the talent pool for business and improves people's standards of living. It enables parents and other carers not only to stay in work, but to advance at work as well. It seeks to ensure that every child gets the best possible start in life.
	The Bill has four main parts. It will extend paid maternity and adoption leave, extend the successful right to request flexible working to carers of adults, help fathers to play more of a role in their child's upbringing if the mother returns to work, and make it easier for employers to manage the administration of those rights.
	The Bill is about fairness, social justice and genuine choice. It is a necessary response to unprecedented change within our society, to unprecedented change within our economy, with the growth of Asia, to advances in technology, and to huge shifts in demographics. It is also a response to unprecedented change in our homes. The old formula dictated that all mothers gave up work completely on childbirth, while fathers sometimes had to work longer hours to make up for the loss of income, particularly if the mother was the higher earner. Increasingly, fathers want to play a more active role in child care, beyond the first few weeks of the baby's life, and more and more mothers want to return to the workplace after having a child, often because of a financial imperative, but also because they see work as an important part of a fulfilled life.
	Around half of all mothers now return to work after having a child compared with a quarter a generation ago. Men now take on a third of all child care. So the birth of a child need not be the end of the mother's career. Mothers should not be forced out of the work force when they would rather stay on, and businesses should not be deprived of highly skilled, highly trained, highly capable staff when they want to retain them.

Michael Weir: I understand what the Secretary of State says and very much support the Bill, but one small groupthose who have a family by means of surrogacyhas been missed out, and I have taken up a constituency case with Ministers in the light of employment relations. The Bill covers only natural birth and adoption. Will he consider including that small group within the ambit of the rights?

Alan Johnson: I would be prepared to consider that again. We found some complications with it, but there is every opportunity to look into that in Committee.
	Providing genuine choice is important for the individuals concerned and for the companies for which they work, but it is also important for the country's continued economic prosperity. The Government are determined to increase the proportion of people in work from 75 per cent., which is the highest of any G7 country, to 80 per cent., a level achieved only in Icelandthat is the country, incidentally, not the retail outlet.
	The so-called family-friendly agenda, which has a crucial economic dimension, was neglected for too long. When we came into power in 1997, a father could watch the birth of his child in the evening and be compelled to go to work the next morning. We established the entitlement to paid paternity leave for the first time in this country.

Norman Lamb: Will the Secretary of State give an idea of the current take-up of the entitlement to two weeks' paternity pay? There is a great deal of concern that because the pay is quite low, and because of the straitjacket in terms of notice requirements and so on, the take-up is low.

Alan Johnson: I do not have the exact figure, but take-up is encouraging and high. The matter does not relate just to those people taking paid paternity leave under legislation, but to the number of companies that accept that paternity leave should be a normal part of employment rights. Many companies that have had arrangements for maternity leave have their own arrangements for paternity leave. I shall ensure that the hon. Gentleman gets the correct figure, perhaps during the wind-up, but it is encouraging.
	In 1997, a working mother could receive a phone call from school saying her child was ill and her employer could still insist that she stay at work. We introduced a right to time off to deal with family and domestic emergencies. In 1997, adoptive parentsincrediblywere given no help whatsoever, despite the huge benefits to society of taking children out of institutions and placing them in a loving family environment. We have given adoptive parents broadly the same rights to pay and leave as natural parents. In 1997, paid maternity leave was 18 weeks. By the end of this Parliament, it will be 52 weeks. In 1997, maternity pay was 55 a week. Today, it is 106 a week.

Mark Prisk: The Secretary of State rightly suggests that the Bill should be about fairness. Is it fair that families who run small businesses should have to pay for the administrative costs of the changes that he is trying to implement?

Alan Johnson: In terms of maternity leave, the hon. Gentleman well knows that small businesses get 104.5 per cent. reimbursed, unlike larger companies. He was a distinguished member of the Committee that considered the Employment Bill. We also increased the level of national insurance contributions that determines the 104.5 per cent. so that more small firms managed to benefit from it. We have been meticulous in trying to keep the cost of the arrangements to an absolute minimum. In terms of maternity leave and its extension, we have introduced, as small businesses wanted us to, various arrangements to give practical assistance.

Mark Prisk: rose

David Burrowes: rose

Alan Johnson: I want to make one final point.
	In relation to paternity leave, we are taking a power in the Bill. We intend to consult widely on the regulations to enact that. A large part of that will be to determine how small businesses are affected.

David Burrowes: Although small businesses can reclaim contributions, does the Secretary of State appreciate the significant impact such leave has on them? As 95 per cent. have five employees or fewer, the loss of manpower and skills could be considerable. Although much in the Bill is to be credited, many might interpret it as tokenistic. A true family-friendly policy should be within the taxation system, to give proper recognition of single-earner households and to benefit them.

Alan Johnson: I do not accept that. Interestingly, the hon. Gentleman mentions manpower, so I presume he is talking about paternity leave. We do not initially expect a large queue of people waiting to take the leave. We think that it will apply to 16,000 to 18,000, and about one in 700 small businesses will be affected every couple of years. It is unlikely to have an enormous impact.
	I want to stress the positive impact on the employment market and small businesses in particular. Many small businesses, including a small business man, Simon Topman, helped us to shape much of what we have done on work-life balance since we came into power. It is about ensuring that small businesses do not lose valued members of staff. People, usually women, found it difficult to balance their working life with their domestic requirements. Many small businesses have been pleased that the legislation has been implemented because it helps to retain staff.

Several hon. Members: rose

Alan Johnson: I shall give way to the hon. Member for Buckingham (John Bercow).

John Bercow: I have just taken a short and enjoyable period of paternity leave and I might plan to take some more, to the obvious and understandable delight of the Whips. With reference to the secondary legislation provided for in clauses 3, 4, 5, 6, 7, 8 and 9, will the regulations be subject to the negative procedure of the House or to its affirmative counterpart?

Alan Johnson: The regulations will be subject to the affirmative counterpart.

John Bercow: Excellent.

Alan Johnson: Although we would all miss the hon. Gentleman when he goes on paternity leave, I hope that he takes it.

Alison Seabeck: To return to the point made by the hon. Member for Hertford and Stortford (Mr. Prisk), does my right hon. Friend agree that small businesses benefit from offering flexibility to their staff, because they might otherwise lose experienced staff whose replacements would be expensive to train? The logic behind the provision is that by offering staff flexibility, a business retains their skills.

Alan Johnson: My hon. Friend is absolutely right. In fact, the average cost, for example, of the right to request flexible working is 80 whereas the average cost of recruiting a new employee is 4,800.

Tobias Ellwood: I am concerned about the Minister's statements on how the measure will affect small businesses. Is he not worried that if more burdens are placed on small businesses, they will design their work force to avoid the people who   might receive paternity and maternity rights? [Interruption.]

Alan Johnson: As the chorus behind me is pointing out, that would be illegal. The hon. Gentleman makes the argument that we heard when we introduced the right to request, when we introduced the national minimum wage, when we introduced adoptive leavein fact, on every occasion when we have tackled that agenda. Conservative Members such as the hon. Member for Buckingham (John Bercow) and the right hon. Member for Maidenhead (Mrs. May) recognise that it is an important agenda. It is about time their party adopted a positive approach to it. As soon as we get anywhere near setting up decent, civilised, minimum standards in the workplace, we hear a chorus of, This will reduce people's ability to recruit staff. Yes, that is a crucial concern that needs to be tackled and we have tried very hard to ensure that it is, with some success.

Helen Jones: In addition to emphasising the benefits to small businesses of the measures in the Bill, will my right hon. Friend resist the siren calls to deal with the matter purely through the tax system, which is a regressive way of dealing with it? Maternity rights and benefits have benefited a lot of low-earning families and dealing with the matter through the tax system will benefit only those who can afford to live on one wage.

Alan Johnson: My hon. Friend makes an extremely important point more eloquently than I could. We must consider that during our debate.

Mark Prisk: Some time ago, when answering my original question, the Secretary of State said that small business organisations had made clear representations that they favoured elements of the Bill.

Gerry Sutcliffe: indicated assent.

Mark Prisk: I see the Under-Secretary of State nod. Unfortunately, he has just given me a reply to a written question that states that he is not aware of what the representations from small businesses were. Will the Secretary of State now answer a simple question? A moment ago, he told the House that he understood that the small business community was very much in favour of the changes, especially the maternity leave provisions. Will he therefore explain why 80 per cent. of the respondents to a survey conducted by the British Chambers of Commerce said that they had grave reservations and opposed those changes? I, like the right hon. Gentleman, want to do the right thing for parents, but we must do the right thing for businesses as well.

Alan Johnson: I think that that survey, if it is accurate, was about interchangeable leave, which has now turned into additional paternity leave, and the idea that small businesses would have to police a system in which they had to know that the mother had returned to work before they could give authority for the father to take the additional paternity leave. That is why we have taken a power in the Bill to ensure that we are able to consult widely. We have ideas, which will probably emerge during this debate, about how to achieve that using a very light touch.
	The issues that small businesses mentioned to us included the rule that maternity leave and maternity pay start on different days and the complication that that produces. Small businesses asked why it could not all start on the same day and whether the rate could be a daily rate, rather than a weekly one. The latter would help with another issue that they raised, which was that if a woman was going to be away from the workplace for up to 12 months, there should be an opportunity to bring her back infor a day's training, for examplewith the agreement of both sides and without penalty. If that happens now, the woman loses a week's maternity pay, just for coming back for a refresher day to get used to new technology. Those are practical considerations, as is small businesses' request that a woman who returns from maternity leave before the end of that leave should have to give more than four weeks' notice, which is all she has to give now. We have therefore doubled that requirement to eight weeks, because that is a legitimate and practical thing to do. In that and many other ways, we have shown that we are keen to help small businesses to deal with these matters.

Julie Kirkbride: Before moving on will the Secretary of State answer what I feel is an illogical point in the arguments made by some Labour Members? If he is right and the measures will be of great benefit to small businesses, because it would cost them 80 to process an application for maternity leave whereas it would cost some 4,000 to train high-value staff, why cannot businesses work that out for themselves, without his law making them do it?

Alan Johnson: I was talking about right to request costing 80. When we introduced the right to requestI see several faces familiar from the time spent scrutinising that legislationwe were told that it would be the end of civilisation itself, that it would be horrendously bureaucratic and would affect people's jobs, but that simply has not happened.
	The cost to business of the maternity leave provisions has hardly figured in the representations. Concerns have been voiced about paternity leave and the extension of right to request, but little concern has been expressed about providing that a mother should have nine months' paid maternity leave instead of six months and that that should eventually increase to 12 months. That has widespread support.

John Bercow: The Secretary of State is being extremely generous in giving way. In clause 13, which deals with annual leave, he is proposing to be able in certain situations to introduce regulations to prescribe certain periodspresumably minimum periodsof annual leave to be allowed. I ask in all seriousness, is the intention to apply the power relatively narrowly in order to cater to the interests of groups of workers who have either no annual leave entitlement to speak of, or a very modest entitlement? I refer, for example, to the cleaners contracted to work for the House of Commons, who have a pathetically inadequate annual leave period of 12 days. If the intention were to deal with that situation, there could be a lot to be said for the clause. Perhaps the right hon. Gentleman will explain.

Alan Johnson: The intention is to fulfil a manifesto commitment that employers will no longer be allowed to take bank holidays into account as part of employees' four-weeks statutory entitlement to annual leave. Bank and public holidays must be additional to the four weeks' paid leave. That is the reason for the clause.
	So, Madam Deputy Speaker, I return

Norman Lamb: Will the Secretary of State give way?

Alan Johnson: Well, I almost returned to my script[Laughter.] I give way to the hon. Gentleman.

Norman Lamb: I am grateful to the Secretary of State for his generosity. On the point that he just made, the Confederation of British Industry has suggested that any increase in annual leave entitlement to deal with bank holidays should be phased in to allow businesses to adjust. Does he have in mind such a phasing-in?

Alan Johnson: Again, we have taken a power in the Bill because we want to consult widely and listen to such arguments. That will be an important part of the debate on that part of the Bill.
	Since 1997 we have trebled the financial support that a working family gets in the first year of a child's life from 2,610 in 1997 to more than 8,000 by April 2007. We have created 1.2 million additional child care places and guaranteed all three and four-year-olds a free part-time nursery place. It is worth remembering that the Conservative party opposed every single one of those measures.
	The Bill has four principal parts. The first part will allow us to extend paid maternity leave and adoption leave from six months to nine months from April 2007. By the end of this Parliament, we intend to extend that to a full 12 months' paid maternity leave. The second part will extend paternity leave and paternity pay. Paternity leave will increase by up to six months in the second half of the baby's first year if the mother returns to work. The third part of the Bill will extend the right to request flexible working from April 2007 so that it covers carers of adults, as well as parents of small children and disabled children up to 18 years of age. The right to request has been an enormous success and has been taken up by almost one in four parentsalmost 1 million parents in total. Eighty per cent. of all requests for more flexible working have been agreed immediately, with a further 10 per cent. agreed with modification as a result of discussions between employer and employee. Only one in 10 requests have been refused.
	Most respondents to our consultation said that carers of adults should be the priority in extending the right to request. Some 6.6 million people have caring responsibilities and 3.5 million of them have jobs. Their role in society has become more important, given the ageing population and a growing need for family care rather than institutional care. That is why this aspect of the Bill will make an important contribution to the economic as well as the social environment.

Philip Hollobone: I hope that the Secretary of State will not finish his introductory remarks without placing on record his appreciation of mothers who decide to stay at home to bring up their children. Where in the Bill are there proposals to improve their pension entitlements when they eventually retire, perhaps after going back to work once their children have grown up?

Alan Johnson: They are not in this Bill, but they are in the Turner report, and we will have to wait for the response to Turner. As I said earlier, the Bill is about genuine choice. If a mother's genuine choice is to stay at home with her child, that is finethat is exactly as it should be. However, we do not want women being forced to stay at home because they have no alternative and having to give up their career. Nor do employers want that; it is bad for society and for the employment market in general, but it happened quite regularly before these measures were introduced.

Barbara Keeley: The Secretary of State said that the right to request flexible working would be extended to carers, and I applaud that vital step. As he said, we are talking about 10 per cent. of the population, or about 6 million carers. Friday was carers' rights day, and I met carers in my constituency who were juggling work and caring, which is difficult. Will the Secretary of State tell the House what definition of caring he intends to use in the regulations, because it is important that that definition remains as simple and flexible as possible?

Alan Johnson: I agree with my hon. Friend. We have not yet decided precisely how we will define it. Obviously, we cannot be simplistic and say that it applies just to elderly parents; siblings also have to be looked after. We cannot say that people have to live in the same house; they could live in another house nearby. We therefore aim to publish draft regulations as the Bill goes through the House so that people can see at all stages what our ideas are and so that we can bring the proposals to fruition for their introduction in April 2007, as we promised in our manifesto.

Kitty Ussher: My right hon. Friend said that he wanted to support women in their choices. When he issues the regulations during the passage of the Bill, I urge him to bear in mind those women who want to go back to work before the six month period. They may simply want to return to work, but they may also be the higher earner in the relationship or run a business that would go to the wall if they did not take a hands-on approach. In those circumstances, I very much hope that my right hon. Friend agrees that fathers who want to exercise their paternity rights before the end of the six month period should be allowed to do so.

Alan Johnson: We will certainly reflect on that. The result of the consultation that we published in February was a clear preference to protect that first six months, not least because of the World Health Organisation drive, to which we subscribe, to encourage women to breastfeed for the first six months of a child's life. That was the overwhelming response to the consultation. However, as the Bill proceeds through Parliament, we will listen to representations to see whether we should be more flexible.

Peter Luff: The Secretary of State helpfully said that draft regulations would be published while the Bill proceeds through the House. The timetabling motion says that the Bill will complete its Committee stage by Tuesday 20 December. Does he intend to make those draft regulations available to the Committee before it finishes its work?

Alan Johnson: We can try. The timetable is a little tight, but I hope that we can publish those regulations before the Committee rises. That is probably a heroic ambition, but I hope that we can publish the regulations while the Bill completes its remaining stages and certainly by the time that it returns from the Lords.

Julie Morgan: Does my right hon. Friend agree that the consultation on the regulations is important, particularly in relation to carers for adults and disabled people, many of whom do not regard themselves as carers at all? They would not immediately recognise that they are entitled to a request for flexible working, for example, because they are motivated by a sense of duty and loyalty, and they do not regard themselves as carers.

Alan Johnson: Once the Bill has completed its passage through the House, we must ensure that people, including carers, understand the provisions that are designed to help them. When the right to request was originally introduced in 2002, it quickly became a well-known factor in the workplace. Indeed, many carers asked us at an early stage whether it could be extended to them. There is therefore quite a high level of awareness, but I accept the important point that my hon. Friend made. We must work to ensure that awareness is increased.
	I was talking about the important role of carers in society, which is a significant aspect of the Bill.

James McGovern: To pursue the point made by my hon. Friend the Member for Burnley (Kitty Ussher) about a mother wanting to return to work before the end of the six-month period, does my right hon. Friend agree that a mother who wants to extend maternity leave beyond the six-month period may feel that she is being forced to return to work, even though she does not necessarily want to do so, to allow some father and child bonding to occur and because, otherwise, the father will not be able to use his paternity leave?

Alan Johnson: Given the way in which we plan to introduce the legislation, that will not be a concern. Two criteria must be satisfied for the provision to be implemented. First, the father must be working and in employment and, secondly, the mother must take maternity leave, then return to work. The point made by my hon. Friend is one reason why people suggested that we should keep the six months exclusively for the mother. I do not accept that the danger he outlined will arise, but we will look at the provision more carefully as the Bill proceeds through the House.

Norman Lamb: To return to the issue of flexible working and carers, the right hon. Gentleman's response to an earlier intervention suggests that he is looking at a wide definition rather than one that applies to a narrow group of people, which would be of little value. Will he confirm that that is the case? The Parkinson's Disease Society points out that it is problematic to make a request only once a year, particularly with conditions that vary over time. Will the right hon. Gentleman reflect on that to ensure that there is sufficient flexibility for people who care for individuals with conditions that may change over time so that they can return to their employer to discuss alterations to their arrangements?

Alan Johnson: We will reflect further on that pointthe hon. Gentleman has said that that means that we will not do so, but that is not the case. We think that one request is correct, because it would be difficult for employers and, indeed, employees if such requests were to become six-weekly rituals. In that case, someone who had been granted flexible working would have to ask for it again a little while later. Furthermore, if a dialogue were to take place in which everyone accepted that a company could not work like that, it is unlikely that that company would be able to grant a flexible working request two months later. Those are the reasons why we originally limited requests to one a year, but, obviously, if the society that the hon. Gentleman has mentioned wants to make a representation on that point, we can re-examine the matter.
	Fourthly, the Bill includes a number of deregulatory measures to help business manage absences related to child care. Businesses said that they need more notice of when women who do not want to take their full entitlement plan to return from maternity leave. As I have said, we have increased the period of notice from one month to two, which provides the kind of certainty that will greatly assist employers. Employers also said that they would like to calculate maternity, adoption and paternity pay in daily as well as weekly amounts, because the rules on maternity leave and pay were out of sync and were creating problems. As I have said, we intend to address those employers' concerns.
	Businesses also said that the rules about contact were too restrictive, meaning that employees were missing out on things that they wanted to do, such as training. The Bill contains a power to allow keeping-in-touch days, so that where employers and employees agree, a limited number of days of work can be done without employees sacrificing pay or ending their leave. We will follow that up by introducing regulations that make it clear that employers can make reasonable contact with their employees on maternity leave and adoption leave.
	Finally, the Bill also includes a power to deliver our manifesto commitments on annual leave. While many people already get bank holidays in addition to their statutory leave, some do not, and the powers in the Bill will enable us to rectify that. However, we do not underestimate the complexity of the matter and will consult fully before exercising those powers.

Mark Prisk: Will the Secretary of State tell the House whether those powers are retrospective? I assume that they are not, but the legislation does not make the matter clear.

Alan Johnson: The hon. Gentleman's assumption is correctthose powers are not retrospective.
	In closing, there is a myth about the family friendly agenda that it will stop employers taking on women, and we have touched on that point in interventions. Yet female employment rates are rising, and countries with more family friendly policies have more women in jobs and senior positions than elsewhere. The best businesses are competing to offer more flexible working patterns, because they know that such working patterns are good for business.
	The Bill promotes, rather than hampers, competitiveness; it broadens, rather than narrows, choice; it is good for business; it is good for families; and, most importantly, it is good for children. It is a Bill that progressive politicians on both sides of the House should support, and I commend it to the House.

Theresa May: I am pleased to say that we agree with many of the aims of this Bill and some of the proposals within it. However, I am bound to tell the Secretary of State that I am disappointed by the complete lack of joined-up government. I shall repeat a point that I made only a week ago in this House, when we debated the Childcare Bill and discussed how it could help parents to achieve a work-life balance: this Bill is also about helping parents to achieve a better work-life balance, so surely the two should have been put together in one Bill, which would have enabled us to examine and debate both sides of the issue. Instead, the Government have chosen to introduce this separate Bill, which has only 20 clauses.
	Given the Government's insistence that the two Bills should be handled separately, it is surprising that they appear to have had such difficulty in deciding who should lead for them tonightduring the course of today, we have been told about three different ministerial line-ups, but I am pleased that the Secretary of State has led for the Government in tonight's debate.

John Bercow: We are gratified.

Theresa May: It sounds like my hon. Friend the Member for Buckingham (John Bercow) is rather too easily gratified.
	In my role as shadow Secretary of State for the family, I have opened both debates for the official Opposition, which shows that we are more interested than the Government in joined-up thinking. The fact that I have been joined by my hon. Friend the Member for Epping Forest (Mrs. Laing), who is a member of our Department of Trade and Industry Front-Bench team, shows that we want to achieve a balance between family and business needs. I urge the Government to ensure that while they are going through interesting and difficult timesthe leadership, pensions reform and education reformthey do not lose sight of delivering the important aims of both this Bill and the Childcare Bill, which will have a significant impact on both families and businesses across the country.
	The Secretary of State has referred to the movement among many businesses up and down the country to understand and deliver on the need for more flexible working practices. Small businesses often find it difficult to enact such provisions, but they often provide flexible working, although they would not perceive it as suchthey perceive it as ensuring that long-standing or expert members of their work force can be kept within the workplace.
	Conservative Members recognise that for many families, balancing the demands of family and career is incredibly difficult. Recent polling by the Equal Opportunities Commission found that nearly seven in 10 women and men agreed or agreed strongly that women's and men's lives are becoming more alike in terms of their need to balance work and family life. The poll also found that 70 per cent. of people were concerned about what family life would be like for their children and grandchildren, and more than six in 10 were concerned about spending enough time with their family. Indeed, the EOC polling showed that people were more concerned about those issues than they were about the state of the health service or crime in their local area. Many families simply have no choice about whether one or both parents goes out to work, and the kind of support that we were discussing last week on the Childcare Bill and now on this Bill can make the difference for families between coping and not.
	Many new mothers want to get back to work as quickly as possible. They want to enjoy a good career and a good relationship with their children, but they sometimes find it hard to do so, because of the prohibitive costs of child care. Other mothers would like to take longer off work to care for their newborn child, but simply do not feel that they can afford the absence from work. Both are equally valid choices, and both put mothers under enormous strain.
	We all recognise that the early months in a child's life are incredibly important and that the positive effects on a child's development from time spent at home with their mother can be hugely beneficial in many cases, which is why we support the Government's intention to extend the period of maternity pay to 39 weeks. Measures which give parents more choice will continue to gain our backing, but many parents will still feel unable to take so long off work. Sometimes they do not want to be away from their jobs for such a long time, but in many cases they are forced back to work earlier than they might wish because they cannot afford to stay at home on the current provision.
	We have always said that new parents should have a real choice about whether and for how long they stay at home with their newborn child. All families are different, and their needs and priorities are different, and the system of maternity pay should be as flexible as possible to meet those needs. Many families will find that the pay offered over the nine-month period is still not enough, which is why we announced plans at the last election to give mothers the option of receiving the total sum that the Government propose to pay over nine months over six months instead. They would thereby have had a significantly increased sum of maternity pay over those six months. We wanted to offer parents a real choice between that significantly increased maternity pay for six months and the current level of maternity pay over nine months and to put them back in control of whether and when they go back to work.
	Earlier this year, in an article in The House Magazine, my hon. Friend the Member for Havant (Mr. Willetts) set out several proposals that he believed the Government should be pursuing in order to ensure that businesses were protected as regards maternity and paternity pay. He cited:
	An increase to the current 28 days notice period for all women returning to work . . . Central administration of maternity benefits with the opportunity for larger businesses to opt out of a central scheme
	and
	clearer guidelines for communication between employers and employees during the maternity leave period.
	I am pleased that the Secretary of State said that the Government will move on at least two of those points, notably on the increased period of notice, which will be welcomed by all employers, and on communication between employers and employers during the maternity leave period. For many mothers, it is extremely important to continue to have contact with the workplace, not only to keep abreast of developments but to feel that they are still in touch with the workplace and have not been forgotten and left to one side.
	I note that those matters are to be taken up in regulations instead of being covered in the Bill. I return to the point that was ably made by my hon. Friend the Member for Buckingham, who cited several clauses that refer to regulations. A significant amount of the Bill's detail is subject to regulations. I welcome the Secretary of State's commitment to publishing draft regulations as soon as possible. It would be preferable if that could be dealt with in Committee, but at least we should be able to look at the detail when the Bill returns on Report. This is a short Bill, and an awful lot of it will be subject to what those regulations say.

John Bercow: I am grateful to my right hon. Friend for her remarks. The Secretary of State responded to my intervention dextrously and without a moment's hesitation, as is his wont, but I am not entirely certain that his answer was correct. I specifically asked him about the order-making powers in clauses 3, 4, 5, 6, 7, 8 and 9, where no reference to the affirmative procedure is made, in marked contrast to provisions in later clauses. If I am wrong, I am happy to concede that, but I do not think that I am.

Theresa May: I understood the Secretary of State to indicate that all the regulations in those clauses would be subject to the affirmative procedure, notwithstanding that that is not mentioned in the Bill. Perhaps he could clarify that.

Alan Johnson: I shall try to be as dextrous as possible. I am pretty sure that that applies to all the clauses. The point to which I gave a quick answer concerned paternity leave, which will be subject to affirmative resolution.

Theresa May: I suspect that we will return to this in Committee.
	We recognise that the right to request has been successful since it was introduced. Everyone, including employers' organisations such as the CBI, agrees that it has worked in balancing the needs of employers and employees. It is encouraging that 90 per cent. of requests are being accommodated by employers. That has had a positive impact on the families who have benefited and on business. In looking to extend it, it is right that the Government should do so only one group at a time.
	As the Secretary of State acknowledged, Britain's carers make a significant contribution to our society. Indeed, it is estimated that they save the Treasury about 57 billion a year. They deserve the same life chances that we all take for grantedto enjoy a fulfilling career and to have a healthy life and financial stability in old age. Many carers want to continue working and enjoy the independence and the break from their caring responsibilities that work provides. More than 2.5 million of the 6 million or more carers juggle care with paid work, but as many as 50 per cent. have been forced to give up work because of their caring responsibilities.
	Flexible working and the promotion of family-friendly policies are good for employers and benefit business, with improved employee relations, greater staff retention, lower recruitment costs and a happier, more motivated work force. That is why we will support the Government's aim of extending the right to request to carers. We are, however, concerned that the definition of carer needs careful consideration. As the hon. Member for Worsley (Barbara Keeley) said, we must ensure that we get it correct. What plans do the Government have to work with carers' groups and businesses to ensure that it not only benefits the groups that it is intended to benefit but is workable for the businesses that will put this into practice?
	It is clear that some employees feel increasingly put upon or hard done by as a result of parents or carers being allowed rights such as the right to request. Many of these new rights work only because of the goodwill of work colleagues who do the extra shifts or accommodate the changes in work patterns for employees. It is important to ensure that the system does not build up resentment in the workplace. Many businesses are now seeing the case for allowing all employees the right to request flexible working. I would be interested to hear what discussions the Government are having with the CBI and others on extending these rights further in due course.
	As I said, we support moves to help families and to give them greater control over their working and family lives. However, we all recognise that any family-friendly policies in the workplace will be successful only if they help business to innovate and to stay competitive. The measures that we have talked about, along with better child care and increased support for parents, allow business to make better use of its work force. They allow employers to retain skilled and effective staff and to keep up morale. The business case has been proven. That is why, in so many cases, business has been leading the way. We should pay tribute to that. Many businesses have found yet more innovative ways to help their staff and to get the best out of them. But the Government's measures will not work if they affect competitiveness. There is no point in being family-friendly if we are not job-friendly.
	When the Secretary of State went on the Today programme to herald the Bill, he prayed in aid the CBI and claimed that the Bill was supported by business, but that is not quite the case. Yes, the CBI supports the extension of paid maternity leave and the extension of flexible working, as well as the increase from 28 days to two months of the notice period for employers when the mother intends to return to work, and the clarification about reasonable contact. However, business has grave concerns about other parts of the Bill. As the CBI said in the briefing that it sent out today:
	Serious concerns remain over Additional Paternity Leave and whether the Government will deliver significant support for employers.
	In the words of John Cridland, the CBI's deputy director general:
	The government cannot have its cake and eat it.
	Employers were originally told that this would be a balanced Bill giving increased rights to employees, with greater powers for and decreased burdens on business. However, several of the measures set to help business that the Government flagged up at an earlier stage have been dropped, seriously affecting the balance between family-friendly and employer-friendly policies.
	Why did the Government decide not to proceed with the proposed transferable maternity leave and pay scheme that they outlined in their election manifesto earlier this year? The hon. Member for Burnley (Kitty Ussher) mentioned that in her intervention on the Secretary of State. Do officials believe that there is a significant risk that the manifesto pledge on transferability would contravene equality legislation? It would be interesting for Members who will serve on the Committee to see the legal advice that the Government received. The Government have a habit of ditching manifesto commitments, but it is unusual to see it so early after a general election. There is genuine concern in business that the Government are not, as they first proposed, implementing transferable maternity leave, which the CBI accepted as long as it was administratively simple, but are instead introducing a new right to paternity leave. There is a real difference between those two things.

Alan Johnson: We have been at pains to explain to the CBI and others that the paternity leave proposals will introduce precisely what would have applied under interchangeability. European and domestic law is tight on protecting the rights of women, so providing for some interchangeability and for them to be allowed to give up some of their leave was difficult legally. We have found another way to achieve that: the woman must be back at work for her partner, the father, to pick up the remaining leave. We always intendedbecause it was the result of the consultationfor that to happen in the second six months of the baby's first year. The actual outcome is therefore exactly as we pledged it in the manifesto. It is simply not interchangeability, which we originally envisaged, because of the legal problems.

Theresa May: I am grateful for that clarification and I accept that an element of transferability remains in the Government's introduction of the additional paternity leave. However, the way in which it is being done in the Bill creates a new right to paternity leave and many employers are concerned about that. They are not necessarily worried about the transferability element but about the potential requirements for the paternity leave further down the line. I remain attracted to the concept of interchangeability. Indeed, we proposed that for consideration more than a year ago. The hon. Member for Burnley set out some of the circumstances in which a family may feel that it makes sense for them for the transferability to happen earlier than at the end of the first six months. I am sure that we shall revert to transferability and its legal aspects when we consider the Bill in more detail in Committee.
	Earlier, I referred to the comments of my hon. Friend the Member for Havant. One of his suggestions to the Government related to the central administration of maternity benefits. Small employers in particular find the statutory maternity pay calculation and the paperwork involved complex. As has been widely discussed in the past, small firms should focus on winning new business, not filling in forms for the Government. They would greatly benefit if the administration of statutory maternity pay were handed back to the Revenue, assuming that a simple procedure for supplying the information to the Government could be developed.
	Many larger firms are happy to continue to administer statutory maternity pay because they are more aware of the rules and more likely to pay occupational maternity pay and they have already invested in the systems that enable them to do that easily. However, many small businesses would perceive the central administration of maternity pay as a significant opportunity to reduce the burden of maternity leave. I continue to believe that it would make sense for the Government to allow firms to choose whether they hand back the administration of statutory maternity pay to the Revenue, providing employers, especially small businesses, with much-needed extra support to help them cope with the significant extra and unexpected burdens.

Alan Johnson: I accept that Opposition Members have not had time to absorb the figures but does the right hon. Lady agree that, if direct payments cost the taxpayer 75 million for a saving to business of 1.1 million and only 400,000 to small businessesthose figures are the outcome of extensive discussions with businessesit is not worth proceeding with the idea?

Theresa May: I have only recently heard those figures. I have not seen the calculation and I do not therefore necessarily accept them. I acknowledge that the Government wish to make a balanced judgment on the cost to the taxpayer and that to small business. However, I find it surprising that the benefit to small business is as small as the Secretary of State suggests. Business organisations have asked questions about the validity of the Government's figures.

Mark Prisk: I accept that the figures are recent and that the Secretary of State's offer to make the process more transparent is welcome. However, does my right hon. Friend agree that it is a shame that the regulatory impact assessments appear to make several omissions? Indeed, no calculation is made for time loss. For businesses, time equals money. Does my right hon. Friend agree that Government regulatory impact assessments make a huge mistake in not including the cost to business of the loss of time?

Theresa May: I agree with my hon. Friend's analysis of the problems with the figures that the Government provide. That is precisely why I am reluctant to accept the figures that the Secretary of State cited at the Dispatch Box today.

Peter Bone: It strikes me that the Secretary of State's statement clearly shows that private business can do things a lot better than the Government. However, it probably also shows that the Government have grossly underestimated the cost to small businesses. There must be some mechanism whereby small businesses get additional payments if they are to continue to do the administration.

Theresa May: My hon. Friend makes some valid points about the genuine impact of legislation on small businesses. Our debate is about getting the balance right between the need to encourage greater ability for families to find the work-life balance that will suit them and to ensure that, in doing so, we are not restricting the competitiveness of British business.

Peter Luff: The Secretary of State produced a fascinating set of figures. If they are accurate, it is difficult to argue with his case. However, it might help us to form a judgment if we knew whether the figures had come from the Treasury or the Department of Trade and Industry. That would colour my interpretation of them.

Theresa May: My understanding is that the Treasury, not the Department of Trade and Industry, did the major work on the figures. That may colour both the figures and my hon. Friend's view of them.
	Although we support measures that make parents more able to spend time with their children, we remain to be convinced that the Government can introduce a system for managing paternity pay that allows the necessary checks to prevent abuse but is not overly bureaucratic for employers to administer. On past form, we are doubtful that the Government will deliver.
	We also seek greater clarification of the proposals, to which my hon. Friend the Member for Buckingham and the hon. Member for North Norfolk (Norman Lamb) referred, for introducing regulations to give the Government the power through secondary legislation to bring in new rules on leave entitlement.
	In his responses to interventions, the Secretary of State made it clear that the Government intended to introduce powers to ensure that the annual leave entitlement for employees did not include the UK's eight bank holidays. If my hon. Friend the Member for Buckingham is correct, the House authorities will have to pay some attention to that proposal.
	I am sure that most employers want to ensure that their staff have adequate paid holiday and will support the need to provide it for their employees, but that move will impose a substantial cost on some businesses and I doubt that many will relish the thought of giving the Government carte blanche to change the rules. Although the Secretary of State was specific about the intention of clause 13, the provision is vague and simply gives the Secretary of State the power to introduce secondary legislation that can affect the rules on leave entitlement. We will want to press the Government on that. If they have a specific intention, it should be in the Bill. Many employers might accept what the Government and the Secretary of State say about bank holidays as part of annual leave entitlement, but they would be worried about giving the Government a simple power to introduceat some stage in the futureother regulations on leave entitlement.

John Bercow: As a general principle, there should be even-handedness between the treatment of the private sector and the public sector. Or, to put it another way, it is certainly not reasonable to impose on the private sector financial costs that it is not judged proper to impose on the public sector. In that context, does my right hon. Friend agree that it would be useful to know, in regard to clause 13(4), whether the Government intend to apply the provisions to persons in Crown employment?

Theresa May: Perhaps the Minister will clarify that point for my hon. Friend when he winds up the debate. The power in clause 13 would certainly give the Government the right to do that. I accept my hon. Friend's overall point about the need to ensure that we strike a balance between the public and private sectors. Indeed, many people are exercised at the moment about the balance between public and private sector pension entitlements. There is a significant and growing gap there, and the Secretary of State has recently made decisions that will encourage that gap to grow. It is incumbent on the Government to look upon themselves as an employer, and to ensure that their house is in order. Another area in which I am afraid they do not come up to the standard that we would expect is that of equal pay. I understand that, while the pay gap in this country is generally between 17 and 18 per cent., it is 21 per cent. in the civil service. The Government really need to look at these issues, and to put their house in order.
	On the regulations that the Government will use to introduce the rules on leave entitlement, it is important that they should discuss with business the impact that any sudden change would have, and that they ensure that any change is introduced in a way that would reduce the severity of that impact on business. A balance needs to be struck between meeting the needs of employees and ensuring that any new provision does not have a detrimental impact on keeping the business environment competitive.
	Families are increasingly looking to us in Parliament to provide a framework to help them cope with the pressures of modern life. Businesses are looking to us to ensure that we do not tie their hands and make them unable to compete in a fiercely competitive global market. It is up to us in this place to ensure that we strike the right balance between being family friendly and business friendly. We on this side of the House will work constructively to achieve that.

Several hon. Members: rose

Madam Deputy Speaker: Order. May I remind right hon. and hon. Members that Mr. Speaker has imposed a 10-minute limit on Back-Bench speeches in this debate?

Liz Blackman: Thank you, Madam Deputy Speaker for calling me. I do not think that I shall use up all my allotted time this evening.
	I e-mailed an officer from the National Autistic Societywhich supports the aims of the all-party group on autismfor a briefing on the Bill. He e-mailed me back to say:
	We focus on clause 12 on flexible working, and it is short because we are basically happy with it!
	I should like to tell the Secretary of State that I am pleased, too. Clause 12 builds on the flexible working provisions in the Employment Act 2002, which confers on parents of children under six, or of youngsters up to 18 with a disability, a statutory right to request a change in their terms and conditions, so that they can move into either part-time or home working, or some other mode of flexible working that fits in with their needs. The Act places on employers a duty seriously to consider such requests, while also providing them with certain grounds for refusing them. It is worth reading those provisions. They aim to protect the employment base and have increased the confidence of employers to move into flexible working, which has led to greater productivity in the business world.
	It was inevitable that the provisions in clause 12 would be introduced after they had been signalled in 2004, and they are the result of extensive consultation. They extend the right to request flexible working to those people who care for sick and disabled adults, and they will come into force in 2007. That represents a ground-breaking change, and it has been introduced in response to the relevant evidence. According to the Equal Opportunities Commission, there are 4.4 million carers of working age in this country, one in five of whom have either left a job or been unable to take one because they could not balance all the different responsibilities involved. Some 2 million people take on a caring responsibility each year, and the demographic trend forecasts that more and more of us will become carers. This provision in the Bill will give such people the right to balance their lives.
	There is also a sound economic case for businesses to take such people into their work force under these conditions, given the wasted potential of carers with skills and talents who could be contributing to the economy in a tight labour market. It is grossly wasteful not to use them. The provisions will also offer carers, many of whom are on low incomes, the opportunity to boost their income and to put aside a little more for their pension provision.
	Several hon. Members have mentioned the fact that we must get right the definition of carers, and I am extremely pleased that this knotty problem is to go out to significant consultation before any definition is decided on. Such a definition needs to capture the full army of carers whom we are seeking to encompass in the Bill. The preferred definition of Employers for Carers, the Equal Opportunities Commission and the National Autistic Society is:
	Carers are employees with significant caring responsibilities that have a substantial impact on their working lives. These employees are responsible for the care and support of disabled, elderly or sick partners, relatives or friends who are unable to care for themselves.
	I understand that there is no point in having a consultation if we alight on a particular definition right at the outset, but I hope that the Secretary of State will consider that definition as the basis of a working consultation process.
	How are the provisions working at the moment? It is one thing to introduce a good piece of legislation; it is another for it to translate into effective action. Many employers already offer flexible working to groups outside the scope of the existing law. According to the Office for National Statistics, however, only a quarter of employees who are eligible to request flexible working have done so; four fifths of them have been successful. The Work Foundation report found that parents on low incomes were less successful in having their requests accepted. All those statistics illustrate that we still have a long way to go and that we need to be more proactive, particularly in helping carers who are not already in work or who do not belong to carers' groups. They fall below the radar, so we need to think more proactively about how we can inform them and engage with them.
	Another aspect of the debate on clause 12 relates to including the carers of children aged six to 18 who do not fall within the disabled category in the right to request flexible working. The phasing in of different groups is sensible, but I hope that we can look at this issue sooner rather than later. Many children do not fall into the categories for which we are legislating, but need their parents to be around more than other children do. There are issues such as family breakdown, young children and older children with mental health problems, 16 and 17-year-olds who are beginning to develop schizophrenia, young girls who develop anorexia and teenagers with drug dependency.
	That said, the Bill will make an enormous difference to carers because it will enable them to spend the time that they need with the people who are important to them, and either to stay in or to take up work. For them, that is not just an economic advantage; it provides a sense of self.

Norman Lamb: To pick up on the point made by the hon. Member for Erewash (Liz Blackman) about flexible working for parents of teenage children, as the father of two teenagers I am acutely aware of the pressures of being a parent of children of that age. There is a strong case to extend the right to that group of parents, as well as to carers, at some stage. I hope that the Government will consider the timing of introducing that.
	It is a pleasure to return to some of the issues that we debated back in 2002, on the Employment Bill, when the Secretary of State was not in his current elevated position. It is fair to say that the introduction in that Bill, now the Employment Act 2002, of the right to flexible working has been a real success. That is because it has a light-touch approach, it does not impose too heavy a burden on employers and it has helped to change the culture of the workplace. That is a good thing.
	The Liberal Democrats broadly support the Bill. We have questions about a number of aspects of it, and we believe that further measures can be taken to lighten the administrative burden, simplify procedures and simplify the law, which remains complex in this area. However, we broadly support the package of measures and will vote for it at this stage should there be a Division. Although there are reservations among the wide group of interested organisations, to which the Conservative spokesman referred earlier, it is none the less interesting that, with reservations, the CBI, the Equal Opportunities Commission, Citizens Advice and the Chartered Institute of Personnel and Development have all broadly welcomed large aspects of the Bill. That is a good thing.
	Why is the Bill important? It is important because getting the balance right between work and family is critical. We would all recognise that the pressures on families have grown considerably. There has been a revolution in the workplace since the days when there was a sole male breadwinner and the mother was at home looking after the children. Now, more than ever, both parents work, which can mean insufficient time to look after and care for children. It is therefore in all our interests to do more to get the balance right. If the Bill helps in that direction, that is a good thing.
	For children who need time with parents and for the increasing number of people who are now cared for at home rather than in institutionsdisabled adults, elderly people and so onthe Bill is of great importance. It is also of importance in terms of maintaining the sanity of those parents and carers and trying to balance the pressures of work and caring, whether for a small child or an adult loved one. It seems to me entirely legitimate for the state to be concerned about setting the right legal framework to balance all those competing interests.
	It is also important, as the Conservative spokesman rightly pointed out, to ensure that we balance the interests of employers in this area. Broadly, the step-by-step, light-touch approach is the right one. The right to request is the obvious example of how that applies, and it seems to me that trying to get employer and employee to discuss and reach agreement about flexible working is much better than the approach taken from the working time directive of seeking to impose an absolute limit on working hours, which the Government rejected, and on which I supported them. There are some questions around trying to lighten the burden on employers. Is enough being done to limit the bureaucratic burden, particularly for small employers? In terms of the cost and the time taken to recruit replacements for those who go on maternity leave, the burden is considerable.
	As the Conservative spokesman suggested, more consideration should be given to the right to opt for a transfer of administration of the payment of maternity and paternity pay to the state, particularly for small employers. I was interested in the exchange about the costs of the private sector doing that as opposed to the state. More analysis needs to be done, and I am not entirely convinced that, as one other speaker suggested, the time cost to smaller employers is analysed sufficiently. I know what it is like for someone employing two or three people to have to cope, in terms of time, with the administration of those payments. Is the analysis to which the Secretary of State referred sufficiently robust in identifying what those costs really are to small businesses?

Mark Prisk: The hon. Gentleman, the Secretary of State and I are all former members of the Standing Committee that considered the Employment Act 2002. That camaraderie aside, does he share my concern that the Secretary of State suddenly leapt up to the Dispatch Box with a set of figures of which, I suspect, most Members of the House and of the Committee are not aware? Does he agree that it is necessary for the House to have complete transparency in relation to the figures, rather than having the legislation apparently rushed through Committee by 25 December?

Norman Lamb: I agree with the hon. Gentleman. I was not aware of those figures, and I hope that in the wind up the Secretary of State or the Minister will confirm that that analysis will be shared with the Committee from the start, so that we can debate those issues properly.
	Another concern for employers has always been the complicated procedures and time limits for a woman seeking to return to work. It is welcome that the Government propose to extend the period required for notification of a return.
	As I mentioned at the beginning of my remarks, the law remains complex in this area and there could be a much more comprehensive assessment of the legal provisions. For a long time, for example, there has been a provision with regard to indirect sex discrimination, where women are disproportionately affected by a particular rule. That has resulted in a lot of claims being brought by women seeking the right to return to work from maternity leave on reduced hours. In effect, it has created a right for many women to have reduced hoursnot a right to request, but a right to have. That overlays the right to request, which is much more light-touch. Many employers simply are not aware of the extra burden of the law on indirect sex discrimination, and the juxtaposition of those two competing rights is a matter that the Government need to consider further as it causes complication for both employers and employees. It seems to me that entitlements only really exist if people understand what they are.
	In raising concerns on the part of employers, it is worth acknowledging that the proposed changes are not necessarily all bad news. The Secretary of State suggested that, overall, the concept of embracing flexible working is good for the economy. In my constituency there is a company called Listawood, which, from the start, has embraced the idea of flexible working. It has enabled women to work different hours during term time and during the summer holidays. They have been able to change their shift patterns to facilitate caring for their children while they are on holiday. They have been enabled to take time out of work to watch their children playing sport at school, including sports' days. The concept from the start has been flexible working. Rather than that being a burden that has driven the company into liquidation, the process has   been a fantastic economic success. The company has won award after award, not only for family-friendly policies but because of its financial acumen and financial success.
	It can be a win-win for employers fully to embrace these measures, and there is the potential that they could lead to more motivated staff and greater productivity if people are working hours that suit them. There is also the potential for greater retention of staff and assistance with recruitment. If a company has a reputation for embracing the entire concept of flexible working, it is much more likely to recruit motivated staff. The idea of keeping-in-touch days and the clarification that the Bill provides of the ability to maintain contact during maternity leave are good things.
	To an extent, the Bill depends for implementation upon regulations. The issue has been raised already by the hon. Member for Buckingham (John Bercow) in interventions. Although that provides the opportunity for some flexibility in that provisions will be able to be changed as time goes by, the process will make scrutiny more difficult. The devil will be in the detail of the regulations. The Secretary of State indicated that he would try to ensure that the draft regulations would be available before the end of the Bill's consideration in Committee. However, if there is to be a proper debate in Committee, surely we should have the draft regulations available at the start of that consideration.

Gerry Sutcliffe: We need to nail the point about regulation. The principles that we are trying to implement are set out in the Bill. The Government are criticised for not consulting widely on the detail of the impact on business. That is what the secondary process of legislation is all about. There is the opportunity during that process for the Government to be questioned on the validity of regulations. Surely that is a way forward for better scrutiny.

Norman Lamb: Indeed; it is to be hoped that that will be the case. Consultation can take place on the detail before a Bill is presented as well as before regulations. At this stage, while considering the Bill, we are not aware of much of the detail in the proposed legislation other than by way of indications and hints. I suggest that that is not entirely satisfactory.

Mark Prisk: I wonder whether the hon. Gentleman detects in the decent manner of the Minister that perhaps there is the scintilla of an opportunity in this instance. The need for the 20 December date is set only by a programme motion. If we are to have proper scrutiny, to which the Minister referred, does the hon. Gentleman agree that there could be merit in a small slippage in the timing of consideration in Committee to allow the statutory order to be before Members so that they might give it due consideration?

Norman Lamb: I entirely agree with that suggestion, which was well made. I hope that the Minister will respond positively to it. I am sure that he will.

Peter Luff: While the hon. Gentleman is making the point, perhaps he will explore the question raised by my hon. Friend the Member for Buckingham (John Bercow). The Secretary of State gave partial clarification in response to a helpful intervention. The regulations that will come under clauses 3, 4 and 6 are apparently not affirmative while the regulations under clauses 13 and 14 are affirmative. The reason for that difference escapes me.

Norman Lamb: I am grateful to the hon. Gentleman for that intervention. He reminded me of something with which I wanted to deal. Clearly, the Minister must respond as the two responses by the Secretary of State were inconsistent. The right hon. Gentleman said that everything was subject to the affirmative process. Later, he confined the process to the paternity leave provisions. There is no logic to the affirmative procedure applying only to the paternity leave provisions and not to other provisions. If the Minister will confirm that the Secretary of State's first answer is the right one and that the affirmative procedure applies to everything, that would be of great assistance. I know that the Minister is always co-operative and helpful. I am sure that Conservative Members share my optimism that he will respond positively.

Peter Luff: I sense that the Secretary of State may be reading a note from the Box. I could be wrong on that. If I am wrong, so be it. I was trying to be helpful in giving him more time. As I understand it, affirmative regulations refer to annual leave in clause 13, and an increase in the maximum amount of weeks pay for certain purposes in clause 14, and not paternity pay. I could be wrong about that.

Norman Lamb: Perhaps I could give the Secretary of   State an opportunity to intervene to clarify the matter. There seems to be complete confusion on theGovernment Benches. Labour Members seem remarkably reluctant to get to their feet. I am giving them the opportunity, here and now, to intervene. Let us hope that we will have a response when the Minister winds up. I am sure that he will have got his act together by then.
	I shall deal with some of the key measures in the Bill. First, there is maternity pay. The provisions will extend the maximum period to a year. By regulation, that will be phased in with the introduction of 39 weeks from 1 April 2007. Representations have been made by a number of groups, and one of the issues is the level of income that maternity pay provides. For many women, the provision is at an inadequate level for them to take the full opportunity that the extension to a year provides. I share the view that has been expressed by the right hon. Member for Maidenhead (Mrs. May) that a degree of flexibility would be a good thing. There should be the entitlement to take the full amount of pay over the entire period. Over a shorter period, there should be the entitlement to take that pay at a higher rate. That seems potentially to benefit employers because they will have the employee back in employment earlier. At the same time, it gives the employee a real opportunity to take advantage of their leave if they are unable to afford to take it at the rate of 106. For many people, that is an inadequate level to enable them to take advantage of the scheme.
	At the last election, the Liberal Democrats proposed the introduction of a maternity income guarantee for the first child, which would have guaranteed at least 4,420 for the first 26 weeks. That would have helped lower-paid women in particular, and it is something that the Government should consider. There are also the proposed changes to adoption leave and pay, which mirror what is happening to maternity leave. That is entirely welcome. As the Secretary of State said, it is remarkable that it has taken so long for us to reach the point where people who adopt children have such rights. It is particularly important for them to have time to get to know their new child.
	I move on to paternity leave and pay. I shall deal first with the existing entitlement of two weeks. There is a case for making that right more flexible in its take-up. Indeed, there is a fairly low take-up. The Secretary of State said that it is encouraging, but I understand that it is still less than 50 per cent. That is partly because the figure is only 106 a week. That is inadequate for many fathers, given the burden of paying a mortgage and so forth. I am told that many people lose out because they are unaware of the notice requirements. By the time that they decide that they want to take paternity leave, they have missed the requirements. If an employer chooses to be difficult, they can be denied the right to leave. There is something of a straitjacket, and if someone chooses to take one week rather than two weeks they will lose their entitlement to the second week. It is not a week that can be taken later. As the Secretary of State will know, there have been many calls for an extension to the entitlement rather than for the substitution entitlement. As part of the assessment to determine whether the substitution entitlement is workable, the regulations will have to be analysed closely. Many people fear that it will be administratively burdensome. At least two employersmore than two if people have two types of part-time employmentwill have to liaise and exchange paperwork to ensure that the father is entitled to take paternity leave because the mother has returned to work for another employer.
	The Secretary of State said that the Bill is unlikely to have an enormous impact, but that is because the pay is only 106 a week. The regulatory impact assessment suggests that as few as 9,000 people a year may take up the entitlement to paid paternity leave. Inevitably, they will tend to be those who are better off. People on lower incomes will not be able to afford it. Again, I think that the Government should consider allowing people to claim the total amount over a shorter period at a higher weekly rate. It might well suit someone to take a month of paternity leave at a higher rate of pay. Some fathers will not benefit because the mothers were not working when pregnant and were therefore not entitled to maternity leave. Four out of 10 mothers are not in paidemployment during pregnancy. The Equal Opportunities Commission has suggested extending entitlement to fathers whose partners return to work after the birth but who are not eligible for maternity leave. Would the Government consider doing that?
	Although the provision for circumstances in which a mother dies after childbirth will affect only about 300 couples, it is a valuable and long-overdue measure, allowing fathers to take the full equivalent of maternity leave. As for the flexible working provision, it is, as I have said, a light touch, and is appropriate for that reason. I fully support the extension of the right to carers but, as many have pointed outincluding the hon. Member for Erewashit all comes down to the definition of carer. The Secretary of State did not respond to my question about whether he intended the definition to be broad. If it is narrow, it will be of little value. It must be broad to meet the expectations of many people who have welcomed the new right in general.
	On the concerns of the Parkinson's Disease Society, I understand why employers do not want a multiplicity of applicationsbut following the extension of the provisions to carers there may be circumstances in which the needs of a cared-for person change a great deal. Will the Government consider an increase in the frequency of applications, perhaps to once every six months?
	Earlier, I mentioned the possibility of extending the entitlement to cover children aged up to 17. As has been argued by the Chartered Institute of Personnel and Development and many others, we may in time reach a point at which every employee will have the right to request entitlement. We heard earlier of the risk that employees without family or caring responsibilities might begin to resent all the new rights in the workplace. The right to request flexible working is light-touch, however, and the employer can refuse the request without fear of a legal claim. Employees will have a greater chance to discuss the matter with their employers in order to get the balance right and to secure a level of employment that will enable them to be fully committed and productive. Surveys show that most employers are already willing to consider applications for flexible working from a wider group than those who are entitled to request it, and I think that that is worth building on.
	Overall, the Bill presents a good package that addresses the need for us to balance the needs of families with those of the economy. We will support it.

Helen Jones: I am grateful for the opportunity to comment briefly on what I consider to be a good Bill. I agree with my right hon. Friend the Secretary of State that it is good for families, employers and society as a whole. I am sometimes bemused by the rather grudging tone of the Opposition, who present themselves as the party of the family but who, when we try to give families more rights, sound as if we are doing something dreadful.
	Let me begin by making the business case for what we are doing. It builds on what the Government have already done, but, as my right hon. Friend said, it is also good for businesses. Employees perform better when they know that their child care needs, or the needs of those caring for their dependants, are being taken care of so that they can focus on their work. It is also much more valuable to businesses to keep staff whom they have trained and skilled than to lose them and have to re-employ and retrain others. Skills will be kept in the business.
	The needs of society as a whole must also be considered. If we want to create a good society, we must first create good citizens. That means investing time in our young people. We do that through education and, I hope, through the youth service, but it is most important to do it through the family. As a parent, I know that the most important thing we can give our children is time. That is particularly true during the important first year of life, but it is also true when children are ill, have special needs, or are particularly dependent on us in any way.
	The Bill represents an important step. It will help people to balance the demands of work and family life. One of the Government's great achievements has been to get so many people back to work. My constituency, parts of which were experiencing second or third-generation unemployment, now has almost full employment. Rightly, however, people are demanding more of us. They demand the ability to manage work and family responsibilities sensibly. The Bill will help us to provide that, and I welcome the extensions of maternity, paternity and adoption leave.
	I also welcome the clause that allows the Secretary of State to make provisions relating to annual leave, but I want to ask a question about it. I understand that it arises from the need to ensure that everyone is entitled to bank holidays, and that such holidays are not deemed to be part of annual leave. Currently, about 2.75 million people are not granted the bank holidays that most of us take for granted. I would be grateful if the Minister told us whether it is his intention that there should be a right to paid bank holidays, so that people who take a bank holiday as a day's leave receive holiday pay for it, and those who have to work on a bank holiday are entitled to a paid day's holiday in lieu.
	I want to raise a couple of questions on what is happening with maternity leave. Currently, six months is classed as ordinary maternity leave, and six months is classed as additional maternity leave. The right to additional leave is not much used at the moment, but I believe that it will be when three months of it becomes paid from 2007. However, I cannot see why we maintain the distinction between ordinary and additional maternity leave. I understand the need to protect the first six months to ensure that the mother is not pressurised to go back to work too early, but maintaining the distinction brings a number of unintended consequences that are a problem, particularly for poorer families.
	For example, a mother has the right to get her job back if she returns to work after ordinary maternity leave. If she returns after additional maternity leave, she has that right so far as is reasonably practical and, if she cannot have her old job back, she is entitled to one that is not substantially less favourableI think that that is the phrase. Apart from creating a lot of work for employment tribunals that try to define those terms, evidence is accumulating that, particularly in the retail trade, women are being offered jobs on very different hours from those that they had previously worked and, often, it is difficult for them to manage on those hours. Therefore, they are being forced to reject those jobs and are falling into the poverty trap. I do not think that that is what the Government intended and we should examine that.
	The other problem is that, although those on ordinary maternity leave are classed as being in full-time work and therefore entitled to tax credits, those on additional maternity leave are not. Again, that impacts on poorer families, single parents, a parent whose partner works for fewer than 16 hours a week, or even parents who wish to go back to work part-time for fewer than 16 hoursmany mothers may wish to do so, particularly if they are still breast-feedingand whose partner then cannot claim the tax credits when the leave is transferred. I hope that my hon. Friend the Minister will undertake to examine those issues as the Bill goes through the House.
	On the tragic cases of mothers who die during child birth or shortly after, I am not sure that the comments of the hon. Member for North Norfolk (Norman Lamb) were accurate. As I understand it, currently, a father in those tragic circumstances is still entitled to only two weeks' paid paternity leave and four weeks' unpaid. The problem is that, when a family has been tragically bereaved, there are real problems not only in finding child care but perhaps in caring for other children. It is difficult to find child care for babies under three months old, and even with children over three months one usually has to make plans very early on, so we are forcing more stress on families that are already under great stress.
	Those cases are rare. I think that there were only 261 child birth-related deaths between 1999 and 2002229 babies were born and more than 500 other children needed care. For that reason, I am sure that it is possible to ensure that families in those tragic circumstances are catered for. Since the Bill enshrines the right to transfer some form of maternity leave, I wonder whether the Minister would undertake to consider in Committee fathers who find themselves in that tragic situation and to see whether it is possible to transfer the mother's rights to leave to those fathers. That would help those families at a very stressful time and prevent more families from falling into the poverty trap. If that is not done, fathers will often end up coming out of the work force to care for their children and find it difficult to get back into it.
	As I said, this is a very good Bill. It builds on what the Government have done, but there are one or two issues that I hope the Minister will undertake to consider as the Bill goes through Committee. If those issues were looked at, it would make it an even better Bill, provide better services for families and help to protect some of our most vulnerable children.

Julie Kirkbride: I am particularly grateful to be called at this point. I think someone on the Conservative Benches had a little word in your ear, Madam Deputy Speaker, as I am hoping to get home to say goodnight to my little boy, which I try to do every evening, although the demands of the House make it difficult on occasions. I wish no discourtesy to you and to the next hon. Member to make a speech, but I will be chasing off after my remarks. Obviously, I hope to be back to listen to the Minister's response to our concerns and to my hon. Friend the Member for Epping Forest (Mrs. Laing).
	On the whole, I welcome what the Government are doing. I echo the remarks of my right hon. Friend the Member for Maidenhead (Mrs. May) as to what the Government are seeking to do. The Government were right on taking office to extend the time for maternity leave and to extend payments for women seeking to take maternity leave. Labour Members always pretend that the gain would have stopped in 1997 and that the Conservative party might not have made equal progress on many of these matters, but time moves on and, given the wonderfully performing economy that was left at the time, clearly these things could have been more easily afforded.

Kitty Ussher: In that case why did the Conservatives oppose our policies on the working tax credit, the child tax credit, extending maternity leave to 26 weeks, two weeks' paid paternity leave, three months' adoption leave, the right to flexible working, increased maternity pay, giving part-time workers the same rights as full-time workers, four weeks' paid leave and the national minimum wage?

Julie Kirkbride: I am not sure whether new Members should always follow the Whips' brief, because I am told by my hon. Friend the Member for Epping Forest, who is sitting on the Front Bench, that we certainly did not oppose all those measures. If the hon. Lady had been listening, she would have heard that I included some of those measures in my remarks. We opposed some, but not all. However, as Back Benchers have a limited time to make their contributions and as I wish to get home tonight, I will proceed.

Kitty Ussher: Will the hon. Lady give way?

Julie Kirkbride: Not again, sorry.
	It is important that mothers, where they wish to do so, take maternity leave. It is also important that mothers should not be pressurised into thinking that they are being neglectful or inadequate if they feel that they cannot take maternity leave and they wish to go back to work, whether for their personal and professional development or because their families cannot afford for them to take maternity leave.
	I implore the Minister to take on board the ideas put forward by my right hon. Friend the Member for Maidenhead and endorsed by the Liberal Democrat Front-Bench spokesman, the hon. Member for North Norfolk (Norman Lamb), that more flexibility should be attached to maternity leave. The Secretary of State pointed out that on the continent there are much more successful models of women being encouraged by family-friendly policies. There is a correlation between those countries where there are such family-friendly policies and the success of women at work. They are much more generous in maternity leave than we presently are in the UK. Therefore, a system whereby a woman can take six months' maternity leave but roll up the money she would receive to 212 a week, rather than the 106 a week for taking a year's maternity leave, might enable many more women to access maternity leave. That would begin to match the provision in other countries that are more successful at encouraging women to take maternity leave and to return to the work force at the level they left it without having to take career breaks, which inevitably mean that women fall back in the race for the top jobs.
	It is desirable that, where women want to, they stay at home to look after their children. As my right hon. Friend said, it is a shame that this Bill and the Childcare Bill, the Standing Committee of which I will serve on tomorrow, were not put together. There is considerable and growing evidence of the importance of what is called the attachment theory, with which the Minister is doubtless very familiar. It is very important that babies and young children form a profound bond with their primary carer in order to have proper emotional development later. The studies on this subject are quite frightening, given the mistakes that have already been made in not encouraging such bonding to take place. Attachment theory is subject to no class or income barriers; it is as relevant to professional families as it is to low-income ones.
	We should recognise that women who are able to afford to take such time off and to work on their relationship with their baby might find their baby quite frightening to begin with. For those of us who have been used to living a professional lifehaving things done when we want them to be done, and having our entire environment work to a time scale that we are in control ofbeing at home with a child is a truly different experience. We should enable women to deal with that situation in a less stressful environment. Of course, the same point applies to paternity leave. The average male wage is some 505 a week, so in calculating the average female wage, we can take 20 per cent. off that figure, which gives us a female wage of about 400 a week. Given those figures, it is much more realistic for women to take such time off.
	Although I am in favour of more flexibility and enabling women to take time off work, I want also to put a little of the employer's case. The hon. Member for Warrington, North (Helen Jones) encouraged the Minister in somewhat the wrong direction in this regard. I do not dispute her motive in wanting women to be able to return to work without being required to accept more onerous and less attractive terms and conditions, but I want to draw attention to an issue that many employers mention to me. When a replacement employee comes in while someone is away on maternity leave, that creates a problem, particularly for small companies, which have much less flexibility in terms of the role played by other employees. This is a cost that society and business has to bear, and it is a fact of life if we want to carry on reproducing. However, extending maternity leave entitlement to one year creates an added difficulty. The person employed to take over that job for a year gets employment rights, because they are in post for the requisite period. Such rights cannot be got rid ofat least, not without a cost.
	The Minister is trying to work around this problem by   doing something of which the hon. Member for   Warrington, North is somewhat disapproving; nevertheless, I urge him to be cognisant of this issue when framing his proposals. After all, small businesses cannot afford to take someone on, only to have to get rid of them in an expensive and uncomfortable fashion because they have to maintain the right of the original employee to return to work. I am not saying that there is an easy answer to this problem; I am simply pointing out that the problem is a very real one for small businesses, and that in framing the law, we need to consider it.
	I welcome the Government's initiative enabling women to keep in touch with the workplace. Many women who are at home with their babies genuinely want to be kept in touch with the normal world that they were used to. It is good to be kept aware of what is going on in the company, rather than simply gossiping with one's old friends. The two-month, rather than one-month, notification period for returning to work will also help in dealing with the difficult issue of the replacement employee.
	Like other Members, I agree that the Government's giving carers the right to request flexible working has proved a very good idea, and I applaud their creating this opportunity for parents. There is no doubt that it has been successful, so we should say Well done. It was successful because the Government were flexiblethey are not always flexibleand created not a right to flexible working, but a right to ask for it. That helped to foster good relations between both parties, and to create an environment in which the employee can continue at work while dealing with their other responsibilities, and in which the employer can gain the value of their skills.
	It is right that carers, who have similar responsibilities, be included under this provision; however, the Government are right to phase in such rights. We live in a society in which many people have caring responsibilities, and that they fulfil them is wonderful for all concerned, but we need to consider how swiftly to phase in these new rights. I urge a little caution on the Minister; we must not swamp the system. It is right that such requests be annual, rather than frequent. Frequent requests would be unfair, given that employers have other considerations on their minds.
	We should extend the right to request flexibility to all the work force, as some employers already do, given that we will always come up against difficult child care cases. Children up to the age of 17 might well be dependent on their carers because they have schizophrenia or other mental health problems, for example. Of course, such problems do not go away: they continue into adulthood, and the parent may feel that they still need to care for their son or daughter well into their adult life. We want society to go in that direction, and some employers have already been successful in that regard; others should be given a little gentle encouragement to do the same.
	In concluding, I apologise to the next speaker for my having to rush off.

Julie Morgan: I am very pleased to welcome another progressive Bill. Last week, we considered the Childcare Bill, and we recently considered the Equality Bill. All these Bills will contribute to a healthier, happier society and to the country's economic prosperity by ensuring a diverse and more contented work force; they will also ensure that the diverse needs of parents and carers are more recognised than ever.
	I want in particular to discuss clause 12 and the part of the Bill that deals with carers of adults. I am very pleased that the existing law will be amended so that carers of adults can apply for flexible working. I must declare an interest, in that I have been the carer of my 94-year-old mother for five years, since she was severely disabled by a stroke. I have managed to continue in the very demanding job of Member of Parliament with the help of an army of paid carersI pay tribute to the people, mainly women, who work in the caring professionsand with a lot of understanding and support both here and at home. However, I meet many carers who are isolated and are struggling to do their best for their relatives, often at the expense of their own health and well-being. It is well recognised that the health of carers suffers; most reports on carers have shown the strain that caring for somebody can impose.
	Many carers are in employment and have to give up their job because they cannot manage both roles. There is now much greater recognition of the importance of caring for older and disabled people, but, as I said in an earlier intervention, many carers do not think of themselves as carers in a formal sense; they think of carers as being paid people. They are doing what they regard as their duty, and what they want to do for members of their familyfor people whom they love. Nor do the many people who are working and caring for adults recognise their huge contribution to the welfare statethe billions of pounds that they save the welfare state. The Carers (Equal Opportunities) Bill, which was introduced by my hon. Friend the Member for Aberavon (Dr. Francis), recognised the need for carers to have access to the education and employment opportunities enjoyed by those who are not carers. This Bill partly addresses that issue.
	The Employment Act 2002 introduced flexible working rights for parents of young or disabled children and, as everybody has said today, that has been a success, despite concerns that it granted only the right to make the request. I was very concerned at the time of the debate on the Act that the provision would not be strong enough and that employers would not respond properly. The employer has to consider the request and take certain factors into consideration when deciding whether to allow flexible working. In any case, as many hon. Members have said, the Act has been a tremendous success and only about 10 per cent. of requests are refused.
	The Government did the right thing, because the Act has made it much easier for parents of young or disabled children to continue to work. It has also brought benefits for the employer. I declare an interest, as my two daughters have benefited from the provision. After they had children, they requested flexible working and benefited from it. It is logical, therefore, that the right to request flexible working should be extended to carers of adult relatives or others, and I am pleased that the Government propose to introduce that right from April 2007. Several hon. Members have suggested that the right to request flexible working should be extended to all employees, and I believe that the consultation by the Equal Opportunities Commission has reached that conclusion.
	When we talk about family friendly policies, we tend to think of the family as a unit with dependent children, but in the UK more adults care for elderly relatives than for children. The Government have concentrated on work-life balance as one of their priorities, the benefits of which are as great for the carers of adults as they are for the carers of children. Many hon. Members have mentioned the benefits to employers of family friendly practices, such as reduced sickness absence, better staff retention, greater productivity, and better morale and commitment. Those are real and important points.
	I remember the stress of juggling bringing up children and working as a local authority social worker. When the Government first took office, we undertook a major consultation of women, and it revealed that work-life balance was one of the primary concerns. Women wanted us to do something about it, and all the measures in the Bill will help. They will also involve fathers more meaningfully, and I very much welcome the paternity leave provisions.
	I am glad that the Government recognise that families are not just those with children. My hon. Friend the Minister and other hon. Members spoke of the importance of the definition of carer. I hope that the definition will be flexible and will take into account the many varied ways in which carers cope and provide support. I was pleased to hear my right hon. Friend the Secretary of State say that a carer does not necessarily have to live in the same house as the person for whom he or she cares. I can think of many carers in my constituency who hold down full-time jobs yet support elderly or disabled parents in their own homes. I hope that such carers will benefit from the Bill.
	It is also important that the Government consult closely with carers' groups. The UK has some well established carers' groups, such as Carers UK, whose members know the reality of caring. We will have to consider their needs when we examine how clause 12 will work in practice. One of the big issues for carers who care for adults is lack of sleep. We all go through sleep deprivation when we have small children and, like many, I am used to getting up frequently in the night. However, if one has to do it for an adult, one knows that the situation will not changeindeed, it may get worse, not betterbut children grow out of it and allow their carer to have a good night's sleep. However, it is difficult to give one's best to one's job without a good night's sleep and we need to talk about that issue with carers. The lack of sleep is one of the major issues raised with me by carers in my constituency. We must take such issues on board.
	People cope with caring in many varied ways, and we have to try to address that. It will not be easy, and the regulations will have to be as flexible as possible. Presumably, we will have to consider the amount of time that people spend caring. Some, for example, are not actually physically present, but keep in frequent phone contact to check whether everything is okay. They may get a response that means that they have to alter the pattern of their day, so we will need to be flexible to address that issue.
	I congratulate the Government on the Bill, especially clause 12, and I think that we are making progress towards a society in which everyone can make a greater contribution than they have been able to make in the past. The Bill will be of benefit to society as a whole.

Peter Luff: It is a pleasure to follow the civilised speech from the hon. Member for Cardiff, North (Julie Morgan) and I am glad that, like earlier speakers, she emphasised the role of carers. This is an important issue and I agree with much of what she said. Having said that, I fear that my speech will probably fall into the category that the hon. Member for Warrington, North (Helen Jones) described as grudging.
	It is important that work is made family friendly, that mothers can take a decent amount of maternity leave, that fathers should spend a decent amount of time with newly born or adopted children, and that carers should have the right to flexible working hours. It is important that the House protects those rights. As the son of a single mother, I benefited from the flexible arrangements that were possible in our small family stationery business, which largely meant that as a latch-key child at the age of eight or nine I could attend my mother in her place of workthe ultimate flexibility. I understand, therefore, the benefits that flow from flexibility in such circumstances, but I am not as clear as Labour Members that the House is always best placed to judge what employers should do to protect their economic interests.
	We must be careful about balancing the needs of employees against those of employers. Indeed, I met two very senior ladies from a FTSE-100 company this morning who expressed the same reservations about the Bill. I am concerned more by the summary of the regulatory impact assessment than by the RIA itself. The summary often cites the benefits that will flow to those affected by the Bill to justify the costs being imposed on employers. My understanding is that the RIA should be much more neutral in its tone and consider the costs imposed on employers and the state by such regulations. I am disappointed by the way in which the RIA so regularly seeks to justify the Bill by reference to the benefits that will flow to employees.
	I recognise that much of the Bill will bring benefits to business, as well as employees, such as the keeping in touch days, which will ensure reasonable contact between employer and employee; the extension of the period of notice that a woman has to give when returning from maternity leave; and the detailed changes to the payment of statutory maternity pay, on which the Secretary of State placed so much stress. However, some people are sounding notes of caution. Richard Smith, employment services director at Croner, which is an expert adviser in employment law, warns that the pendulum may have swung too far. He says:
	Employers are facing a legal maze of parental legislation over government proposals in the Work and Families Bill. The law could be shifting too far in favour of family needs, bringing into question a basic principle of employment law that supports the employer's need for the work to be done.
	My right hon. Friend the Member for Maidenhead (Mrs. May), in her opening remarks, talked of the reservations of bodies such as the CBI. A Library research paper tells us that the CBI said, in its response to the consultation on the Bill:
	CBI members accept in principle the Government's desire to extend family friendly rights further but believe there should be compensating changes to reflect the increased burden on employers.
	That is really my central point. The Bill probably does good, important and useful things that the House should support, but every time we add new legislative burdens to business, especially small and medium-sized businesses, we should operate the one in, one out principle. What real relief will be given to employers for the new burdens they will have to bear under the measure?
	Some say that one consequence of the Bill and similar measures will be an increasing reluctance by businesses to employ women of child-bearing age. When that point was made earlier, the cry came from the Labour Benches, It's illegal. It may be illegal, but that does not mean that it is not a problem. The recruitment industry says that many businesses, particularly small ones, now routinely avoid women in their late 20s and early 30s precisely because of the increased costs of maternity leave and temporary cover. It may be against the law, but it is happening.
	The Recruitment and Employment Confederation recently reported that 75 per cent. of its members had been told by a business not to send them female job candidates in their late 20s or early 30s. More than one in 10 said that they discriminated against pregnant women or those likely to be planning to have children. That is actually happening and it is difficult for the law to catch.
	I have a rather cynical view: perhaps the measure is the beginning of an attempt to level up fathers' rights to make it less unattractive to employ women. I was interested to hear the Secretary of State say that only a few men in small businesses would be eligible for parental rights. I have a horrid fear that in a couple of years we shall be told that as so few men are taking advantage of those rights, we shall make them even more attractive for men, thereby further increasing the burden on businesses. I hope that my cynicism is misplaced.
	The hon. Member for Burnley (Kitty Ussher) reeled off a list of thingsregulatory burdens imposed on business, as I would describe them, even though there might be good reasons for themand challenged us to say whether we would support them. I was one of those who opposed the minimum wage. I now accept that the level at which it was introduced did not cause a problem for business, but it is slowly being ratcheted up. Only this morning, the newspapers reported that the British Retail Consortium is expressing concerns about the latest increase, saying that it will lead to job losses. The minimum wage was brought in at a benign level that had little if any economic impact, but it is now being increased. We must be extremely careful about such issues.
	I pay tribute to the Government for their attempts at robust protection of British business from the impact of the working time directive, but I have in my hand a list provided by the Engineering Employers Federation that I will rattle through. For the benefit of the Hansard writers, I shall give them a full copy. These are the reasons for which employees can currently have days off work: sick leave, annual leave, reasonable time for public duties; if they are a member of a local authority, a statutory tribunal, a police authority, the service authority for the national criminal intelligence service or the National Crime Squad, a board of prison visitors, a health authority, a relevant education body, the Environment Agency or a water customer consultation panel. They can have time off for antenatal care and reasonable time off for trade union duties or training. There is time off for pension scheme trustees, for employee representatives, for members of European work councils and for domestic information and consultation representatives.
	There is not enough time to read out the whole list. It is a jolly list and depending on how we count up the categories, there are 21, 30, 34 or 36 different existing rights for employees to have time off from their place of employment. In fact, I am told that the No. 10 policy adviser in this field was recently reported to have said jokingly that one day the Government would have to legislate for employers to have the right to request employees to come to work.

Alison Seabeck: Can the hon. Gentleman pick out from the list that he half read out which of those rights would be an unreasonable request?

Peter Luff: That is the problem. Each and every one on its own is perfectly reasonable, yet their sum total is unreasonable. To govern is to choose, and some of them will probably have to go, or some other regulations that are burdens on employers will have to go in their place. My contention is that the burden is getting dangerously heavy.

Kitty Ussher: I am delighted that I made such a huge impression on the hon. Gentleman. He said that regulations would have to go. Which ones? Can he be more specific?

Peter Luff: I shall not do that in the short time available, although I would happily discuss it with the hon. Lady over a drink later. When the Government are imposing new burdens in a heavily regulated area they should adopt the principle of one in, one out. We have reached the point when that principle should be respected. The CBI was asking for that. The hon. Lady looks disbelieving, or disapproving, but that is what I believe.
	Britain faces huge competitive challenges in the world economy, yet in this Chamber we often behave as though they do not exist. Under the Government, we have already slipped from fourth to 13th place in the world competitive table compiled by the World Economic Forum, and it is no laughing matter. We face huge competitive challenges and we cannot afford to be complacent in the face of them. We cannot afford to behave as though the world owes us a living: it does not. We owe ourselves a living and it is only by our own hard work that we shall actually get things right.
	My concern is that there will come a moment when some legislation will be introduced to give new rights to employees that is the straw that breaks the camel's back. I do not know when that point will come. I have cried wolf before about thisI plead guiltybut the moment will come. I am fond of cricket, Mr. Deputy Speaker, like one of your colleagues. It is odd that when one watches a game of cricket one thinks that one side is winning, but in retrospect one realises that the other side has started to win. One cannot quite pin down the moment, but it happens. There will come a moment when Britain's competitive advantage has eroded so much that we shall start to lose in the world economy.
	These questions are important and I do not deride the Bill. I respect what it seeks to do. I am a passionate believer in the family, and as has been said I do not believe that we can do everything through the fiscal system. There is a need for rights in this field, but the issues are complex and I am perturbed about the short timetable for the Committee, especially if the draft regulations are not available. Often, I respect the reason for drawing up Bills that leave so much to secondary legislation, but in such an important field it would be much better for the Committee to have access to the regulations. The Bill will be out of Committee before Christmas and that is too short a time.
	The Bill is literally motherhood and apple pieperhaps fatherhood and apple pie. Apple pie is a good thing, especially if made with fine Worcestershire apples, but if the meal that comes before it is too large, there may not be room for it. We need to eat a little less of the other courses to make room for something else that is desirable. That is the fundamental point. Bad legislation and bad regulations are always unwelcome, but sometimes good regulations are unwelcome, too. This may be one of those occasions.
	There is too little time for the Committee to consider such important questions, and the Bill would have been much better if it had been accompanied by a clear statement from the Government of which other regulations they were removing from the shoulders of British business.

Diana Johnson: I listened with particular care to the contributions of Opposition Members. I was pleased that my hon. Friend the Member for Burnley (Kitty Ussher) listed the approaches that they had taken in recent years on the range of employment legislation that has been introduced. It was enlightening and very different from several of the contributions that have been made.
	I want to talk about the context for the measure. I was a lawyer before I entered the House of Commons. I worked in law centres, mainly advising low-paid and non-unionised employees about their employment rights. Statutory employment rights were important to that group, as they did not have the benefit of strong contractual terms and conditions. One of my clients was a security guard in his 30s, with a young family. He came to see me after he had worked for nine months without a day off and asked whether he had a right to annual leave and time off. I had to advise him that he had no rights because the then Government did not want to introduce the social chapter. His only rights were those he had negotiated with his employer and at that time the security industry was, to a large extent, non-unionised. I had to tell him that his rights were minimal.
	Good employers have always recognised the right to annual leave and time off, but bad employers have not. That gentleman, whose name was Andy, had to wait until 1998 when we introduced the working time regulations, which gave the right to annual leave and a limit to the working week. It is outrageous that less than 10 years ago a person could have been in his position. Since 1997, the Government have been committed to fairness at work, which includes recognition of the need for not only economic efficiency but social justice in the workplace. As I said earlier, I am very pleased that we had read into the record a list of the legislation that the Conservative party has opposed since 1997, including rights in respect of annual leave, flexibility in the workplace, part-time workers and extended maternity leave.

Eleanor Laing: Will the hon. Lady give way?

Diana Johnson: No, I will continue because I have only a short amount of time.

Peter Luff: On a point of order, Mr. Deputy Speaker. It may help the hon. Lady to know that, if she gives way, extra time is added to her speech.

Mr. Deputy Speaker: I am sure that the hon. Lady is aware that, if she gives way, time is added to her speech, so she does not miss out by giving way twice, after which, things are rather different.

Diana Johnson: I am grateful to you for that information, Mr. Deputy Speaker.
	The Bill is important in setting out a floor of statutory rights.

Eleanor Laing: Will the hon. Lady give way?

Diana Johnson: On the basis of the information that I have just been given, I will gladly give way.

Eleanor Laing: I thank the hon. Lady for giving way so graciously. I wonder whether she will explain why she is so intent on talking about past times and past legislation. The Conservative party does not oppose the Bill. Should we not get on with making the Bill better, rather than harking back to the past?

Diana Johnson: I am grateful to the hon. Lady for that intervention. When debating such Bills, it is important to consider the context and to ask why we want to implement such provisions. We need to set the record straight about how we have reached this point. It is great credit to the Government that, since 1997, employment rights have been extended while economic efficiency has grown and more people are in work than ever before.
	Clause 13 is an enabling provision to introduce the right for the additional public and bank holidays to be included in addition to the 20 days' annual leave to which employees now have the right. As I said when I gave the example of a client that I had years ago, unscrupulous employers have included the eight public holidays in those 20 days. Those who legislated on the issue were clear that that was not what they intended. I am very pleased indeed that clause 13 includes the right to have the additional eight days' public holiday.
	Clauses 1 to 6 extend maternity and paternity leave and the right to adoption leave with pay, as my right hon. Friend the Secretary of State said clearly in his opening remarks. It is shocking that employers still discriminate against women who are pregnant. I have been appalled by some of the comments made in the debate about the actions of certain employers who have either not interviewed or not considered pregnant women or women of child-bearing age for employment. That is very wrong and clearly a very poor business decision. Such employers miss the talent of a whole group of women. I am very concerned that certain Members think that that is acceptable.

Peter Luff: I wish to put on record that I have never suggested that that was acceptable. It is never acceptable to break the law. I agree with the hon. Lady that many businesses face an economic cost if they take such a foolish decision, but my point was that the evidence shows that things are happening in substantial numbers.

Diana Johnson: With the greatest respect, the hon. Gentleman was not the only hon. Member to raise that point. I am glad that he was able to clarify his position, but other Members seemed to imply earlier in the debate that they understood why decisions were taken that clearly amount to discrimination that should be challenged in tribunals.
	I am very pleased indeed that we recognise that maternity leave should be extended to nine months from April 2007 and, I hope, to one year by the end of this Parliament. Of course, that will benefit about 400,000 women in this country.
	Clause 2, as other hon. Members have said, brings into line the rules about adopting parents. All hon. Members would agree that parents who adopt should be given the same consideration and rights as other parents.
	Clause 6 deals with the entitlement to additional paternity pay, about which the Equal Opportunities Commission has carried out extensive research. About 70 to 80 per cent. of new mums and dads support the opportunity for paternity pay to be used over a six-month period if any of the woman's maternity pay entitlement is unexpired. That is obviously very useful.
	A number of hon. Members have spoken about clause 12, and it is absolutely right that carers are included in the provision to request flexible working. There are more than 6 million carers in this country. As time goes on, the right to flexible working will be extended to other groups, but the Government are taking the right approach by extending such rights piece by piece.
	Hon. Members have put forward various arguments about business efficiency and the problems of small businesses in dealing with maternity and paternity matters. The provisions on the keeping-in-touch days for women on maternity leave are welcome, but some consideration must be given to the reasonableness of those days. Obviously, we do not want to overburden women during their maternity leave, and I hope that those days will be determined by agreement and used positively and constructively.
	The view that a written statement of the rights and responsibilities of employees and employers should be given is very positive. It is certainly my experience that people find great difficulty in understanding the complexities of maternity and paternity law, so clear written statements would be useful. I agree that the request that a woman should give two months' notice of her return date is the right way to do things. That will provide clarity on both sides.
	The Department of Trade and Industry has indicated that it will work to try to reduce that bureaucratic burden of SMP, SPP and SAP. Again, that is absolutely right. There is a need to make the calculations easierin particular, I remember trying years ago to work out when statutory maternity pay should start. As my right hon. Friend the Secretary of State has indicated, SMP does not necessarily start on the same day that maternity leave commences. Those matters must be simplified and sorted out. Overall, the Bill is very welcome. It adds to the range of employment rights that we need. It is good for business; it is good for employees; and it is very good for families.

Mark Prisk: It is a pleasure to follow the hon. Member for Kingston upon Hull, North (Ms Johnson), who clearly showed the House her expertise as a former employment rights lawyer, and I am sure that all hon. Members welcome her contribution.
	This is indeed a Bill of good intentions. For that reason, I support many of the intentions that were expressed so ably by the Secretary of State at the beginning of the debate. He was right to suggest that the concept of fairness should be at the heart of such legislation. That is why I say, with some disappointment, that there is a large group of families for whom fairness does not appear to be at the heart of the Bill. I refer to the 3 million or so families who run and own small businesses. All too often in such legislation, we tend to talk about families generally and we forget the peculiar circumstances of an owner-managed enterprise. I say that as both a grandson and a son of the owner of such an enterprise. It is therefore my intention in the short time that I have available to try to express the views of that group of families, rather than the others to which hon. Members have already referred.
	It is true to say that the Bill comes in a long line of similar legislation. We have had many employment and similar regulatory measures in the past few years. Indeed, since 1997, there has been a 53 per cent. increase in the regulatory burden on businesses, small and otherwise, and the net result is an additional 15 new regulations every working day. The cost to business, which the Government have accepted and is recognised among the leading experts in business, is now equated to 14 billion. That figure comes from the British Chambers of Commerce. Given that 97 per cent. of all enterprises are small businesses, it is clear that the brunt of those costs fall on those firms.
	When we consider regulations, it is important to remember that these kinds of measures have a disproportionately large impact on the smallest firms. I highlight that in the context of the Bill by referring to an excellent survey by the Federation of Small Businesses on the amount of time that firms spend trying to comply with Government requests for information and regulations. Prior to the past six months or so, that figure had reached 28 hours for each firm every month. Each firm thus loses 336 hours a year.
	We normally discuss the productivity and competitiveness question, but we should also consider the time lost to the families of those who own and manage such enterprises. Families lose evenings, and fathers and mothers are sometimes unable to be part of a family Sunday. I used to run my own business, so I well recall the number of Sunday afternoons that I lost filling in the dreaded quarterly VAT return and a raft of other forms. I am worried that although we oftenquite rightlytalk about the need to engage parents in bringing up their children, we forget that such legislation not only has a monetary cost for small businesses, but leads to people losing time in which they can participate in their children's upbringing.
	The irony is that the small firms to which I am referring often have the flexibility for which the Bill tries to legislate. They are the ones that lead because their owners know their employees. I can think of at least three businesses in my constituency that are owned and managed by people going back through several generations and have employees going back through several generations. The owners know about their employees' family situations, so they are able to work around them and to be flexible and engaging. I suspect that the response of the small businesses who read the Bill will be to say, Hang on a moment. We are already doing this. Please don't restrain us by the dead hand of legislation. Of course there are enterprises that do not do such things, and they need to be examined and encouraged to change their habits. However, legislation is all too often a pair of handcuffs that does not enable change in the way in which I suspect that hon. Members would wish it to.
	Let me refer to several specific aspects of the Bill. We have debated the question of maternity leave, but I do not think that the scale of the change has been truly considered. We are talking about increasing maternity leave through two steps from six months to 12 months, which is a doubling of the amount and thus a significant change. The previous Bill, for which the Secretary of State was the Minister, increased the time period from 18 weeks to six months. That was manageable, but an increase from six months to 12 months is a different ball game altogether. The crossover to other legislation and the change in rights that that might well create have been referred to.
	I suspect that the Government did not take account of several matters when they considered the change. If a firm with two or three people loses a key worker for a year, it is tremendously disruptive. One must also take account of the cost of training a new individual, let alone the agency fees that are often incurred when employing that person. Of course, there will also be training costs involved when people return to work. I am not sure whether the Government have seriously considered the full costs involved. When the Minister winds up the debate, will he confirm whether the costs to which I have referred are specifically included in the regulatory impact assessment? I could not see that they were, but perhaps he has a sharper eye than me. I ask that question simply because if we are genuinely to understand the benefits and costs of the Bill, we must have the full information before us.
	Let me turn to what is loosely described as the transfer of parental leave. I appreciate that the provisions in the Bill do not reflect the Labour party's original intention. The concept of mothers and fathers sharing parental leave is good in principle, but what about the practicalities? It is likely that a mum and dad will work for different employers, so we must ask how the measure will be implemented. The Federation of Small Businesses said:
	we fear that the plans will be highly complex and virtually impossible to enforce, with small employers facing an administrative nightmare as they try to comply.
	I have a question in my mind as the consultation proceeds. At the moment, it appears that the onus is on small businesses to manage the process, but why should that be the case? Small businesses are already asked to be unpaid tax collectors and unpaid benefit offices. Why should they now administer the Government's social policies? There could be a dangerous precedent. I do not want to make wild forecaststhe Minister knows that I will not try to do sobut I would like to know whether the Government have really thought the measure through.
	Given the inherent complexity of the measure, would it not be fairer if the Government took some responsibility for their own policies and introduced direct payment of both statutory maternity and paternity pay from state to employee? I know that the Minister touched on the matter earlier in the debate, but I would welcome any clarity that he can bring to our deliberations.

Peter Luff: My hon. Friend makes an important point. The full regulatory impact assessment seems to cost in remarkable detail the burdens on Government, but the burdens on small and medium-sized companies are set out in sketchy detail.

Mark Prisk: I wish that I were surprised, but I suspect that on closer examinationwhen the Committee gets its teeth into the matterwe will find further omissions. My hon. Friend makes a sensible point.
	I have repeatedly raised the question of the cost of the Bill during the debate. Hon. Members might not have noticed this, but apparently the Government expect to spend 369 million more each year, as an employer, as a direct result of the Bill. It is thus expected that during the next Parliament, there will be a 1.8 billion increase in the cost of employing the same people who are employed today, although I suspect that there will be no noticeable change in the delivery of public services.
	There are costs for private employers, too. The cost will be 208 million in the first year, and that will rise to 284 million in each and every year following that. As the mathematicians among us will realise, that represents 1.3 billion over the course of the next full Parliament, which is a substantial sum. Given the point that my hon. Friend the Member for Mid-Worcestershire (Peter Luff) has just made, our earlier exchanges with the Secretary of State and the omissions that we have clearly identified, I am worried that the Bill will lead to substantial costs. I have identified 3.1 billion of costs to begin with that do not seem to have been fully considered during the deliberations on the Bill. However, I know that the Minister is a reasonable man and will want to make sure that we have such information, so I look forward to receiving it.
	I have had insufficient time to consider many of the Bill's positive aspects. I make no bones about that because it is important that we try to tease out the weaknesses of legislation during our scrutiny. I fully accept that there is a need to balance our work and family lives, but we need to make sure that that balance extends to all families, especially those involved in small business and those of entrepreneurs. The Secretary of State promised us in his opening remarks that the Bill would be good for business and good for families. Conservative Members agree with those sentiments, so we intend to ensure that he keeps his word.

Alison Seabeck: We heard my right hon. Friend the Secretary of State explain the Government's intentions in introducing the Bill, including extending the maximum period for which maternity pay, maternity allowance and adoption pay are payable from 26 weeks to 52 weeks during the course of this Parliament, as well as introducing a new scheme that provides certain employees with a new entitlement to take leave to care for a child. In listening to the Secretary of State's remarks, I found myself drawn back to the time when my daughters were born and the position in which I, along with other mothers and, indeed, fathers, were in. I hope that the House bears with me if I draw a little on my personal experience. My daughters were born in 1981 and 1985, when the Conservatives were in power, and my entitlement was just 29 weeks post-confinement, supported by a payment of 90 per cent. of income over just six weeks. I was employed in a further education college and my husband was a town planner. Neither of us earned generous salaries and there was clearly a need for both of us to work. However, because I wanted to stay at home initially with my first child, I resigned from my full-time post and had to face finding a suitable part-time job and child care when the financial imperative kicked in and I needed to go back to work. After the birth of my second child, I returned to work immediately at the end of the statutory period, but I would have welcomed the keeping-in-touch days that are proposed.
	In a perfect world, I would have preferred to have had the option of remaining at home for a longer period or, indeed, of allowing my husband to take part of the leave to care for our children, a subject raised by my hon. Friend the Member for Burnley (Kitty Ussher). Although the evidence suggests that the number of fathers wishing to take up the option is small, there are, none the less, those for whom it would be a very welcome option. Some 24 years on from my experience, there is clear evidence to show that both mothers and fathers believe that it should be the norm for there to be greater paternal involvement in the early months of their child's life. Indeed, in a recent Equal Opportunities Commission survey, seven out of 10 women and men agreed or agreed strongly that women's and men's lives are becoming more alike in terms of their need to balance work and family life.
	Opportunities to improve the work and caring balance have been lost in the past. For example, in November 1985, shortly after the birth of my second child, there was a debate in the House on parental and family leave. The then Conservative Government could have accepted a European Economic Community directive extending paternity rights, but they chose simply to note the directive. As that great campaigner for equal rights, the late Jo Richardson, commented at the time, it showed how out of touch they were with the day-to-day reality of people's lives. Unfortunately, one or two Conservative Members are still a little out of touch, although I acknowledge the positive comments from the Front Bench.
	A significant number of fathers probably want to take paternity leave but are unclear about their rights early enough in the process to plan properly. Evidence suggests that, in parallel to the powers in the Bill, an information campaign needs to take place to inform them of their rights. I am concerned that fathers whose earnings are below 20,000 per annum are less likely to find out about their rights prior to the birth of their child than those fathers whose income exceeds that figure.
	Given the findings of the Equal Opportunities Commission's survey Dads and their babies, which was funded in part by the Department of Trade and Industry, I would welcome the Minister's comments on whether he accepts that there is a real job of work to be done to ensure that fathers are properly informed of their paternity rights from formal sources, rather than simply relying on friends and family for that information. Given that many of these important proposals require change via regulations, I also seek reassurance that there will be no significant delay in introducing them, allowing, of course, for the caveat that we need to consult on some of them.
	The Bill addresses not only the period immediately following the child's birth, but the need for further amendments to existing legislation to allow a wider range of individuals greater flexibility of working. Clause 12, which has been mentioned by a number of hon. Members, gives carers the right to request flexible working for the first time. We know that in the region of 3.5 million carers are struggling to work as well as care. I share the support that my hon. Friend the Member for Erewash (Liz Blackman) and the National Autistic Society have given to the clause. Without that flexibility, we lose a number of highly skilled workers who have to make a difficult decision between work and caring. Our economy can ill afford to lose the expertise of those workers, especially at a time of skills shortage. The cost to employers of recruiting and training new employees to fill their shoes is a burden, and I refer the House to the figures given by my right hon. Friend the Secretary of State.
	Enabling people to remain in the workplace also has the added advantage of enabling them to continue to build a better pension for themselves. I also welcome the proposed extension of rights to carers of adult dependants, but hope that in due course that freedom will be extended to parents of older children through the use of the regulatory powers in the Bill.
	It is still a little unclear where the age definition will fall, something that was mentioned by hon. Members on both sides of the House. We need greater clarity on the definition of the relationship between the employee and the child or person over 18 who requires care. A number of employers, both large and small, already encourage flexible working, but there are different definitions of what they understand a carer to be. Let me give some examples. In Centrica's view:
	If you are a carer, you have responsibilities, which have an impact on your working life. You will be responsible for the care and support of a disabled, elderly or sick partner, relative or close friend who is unable to care for themselves as they are ill, frail or have a disability.
	According to British Telecom:
	A carer is an employee with significant caring responsibilities, which have a substantial impact on their working life. These employees will be responsible for the care and support of a disabled, elderly or sick partner, relative or friend,
	and HSBC defines carers as:
	Employees who are the prime carer of a sick child, elderly, disabled or chronically sick relative or other close dependant.
	Each has a slightly different understanding of what a carer is, so it is important that we provide as simple and as flexible a definition as possible.
	That said, I warmly welcome the Bill and look forward to the Minister's closing remarks.

Michael Weir: The Scottish National party and Plaid Cymru welcome the Bill. We recognise that the rights it gives are an important step forward for men and women in employment. I should like to comment on one or two aspects.
	I join in the general welcome for clause 12. The extension to carers of the right to ask for flexible working is extremely important. I have met many carers in my time as a Member of Parliament and I have been struck by how many had to give up work to look after sick children or relatives and ended up relying on state benefits. When, sadly, their elderly relative dies, they often find it very difficult to get back into work. If the clause helps people to stay in work, it is very welcome and long overdue.
	I also welcome the provisions on paternity leave, but I ask the Minister to consider creating greater flexibility. I know that it will be difficult, but several hon. Members have mentioned that point. I look back to the time when my children were born. I was self-employed and was able to change my work patterns to tie in with what was needed and to be with my wife when our children were just babies. It was an important and useful thing to be able to do. As I see it, the problem with the Minister's proposal is that there no cross-over periodthe mother will have the first six months and the father the second. We should find a way to work in a little flexibility to allow both parents to stay at home, especially when a child is first born. That could be very important, because it is often difficult for new and young parents, or in some cases not-so-young parents, to come to terms with the changes in their lives that a baby brings.
	It is also important that employers understand the rights in the Bill. Although we give employees rights, enforcing them is often a different matter. Good employers will always try to keep good employees and will bend over backwards to give them the consideration they need, but that is not true of all employers, and that is a problem. Other hon. Members will have received Citizens Advice's excellent booklet on the Bill, Hard labour: Making maternity and paternity at rights at work a reality for all. Some of the case studies it contains are disturbing, but Citizens Advice also makes the valid point that
	the Government's strategy in relation to these and other statutory workplace rights must include steps to ensure more universal compliance by small employers, including more pro-active enforcement against rogue employers.
	Although it is possible to take employers to an industrial tribunal, it is often not easy to do so. It is time consuming and many employees find the process of taking an employer to an industrial tribunal extremely difficult and daunting. I know from my experience as a solicitor representing people at industrial tribunals that it can also take a very long time.
	One group that does not appear to be adequately covered at present is those who are, as the Library note puts it, somewhat coldly,
	commissioning parents in surrogacy arrangements.
	I was encouraged by the Secretary of State saying in response to my earlier intervention that he would look again at that matter. My interest was prompted by a constituency case. My constituent could not obtain a decision from her employer about what, if any, rights she had to take time off to spend with her new baby. The case did not appear to be covered by either maternity or adoption leave legislation, and the couple were left in limbo. When they approached me, I thought that the matter should be treated in the same way as adoption, with which it had many similarities. However, that is not the case under the existing legislation, and there was no automatic right to leave or pay. I intervened with the employera major public sector employerwhich, to its credit, accepted that the situation should be treated in the same way as adoption and agreed to do so. Howeverand this is the point I wish to makethat was at its discretion, and my constituent did not have any automatic rights, which is unfair.
	I took the matter up with the Minister, who confirmed the legal position in a letter:
	There is no specific statutory right for parents who have a child through surrogacy to take time off following the birth of their child, and currently no plans to change this.
	To be fair, he explained that maternity rights were originally a health and safety issue, but things have moved on. We are now talking about a work-life balance for families, and surrogacy is an important issue. The number of people involved is low, but the matter should be given due consideration.
	The Bill does not change the position, as the Minister accepted. When the Bill was published I asked the Library to prepare a briefing note, which confirmed that nothing has changed. That note now appears in the Library research paper, so perhaps I have secured my place in history by achieving a mention of the subject in such a paper. I urge the Minister to consider the particular circumstances of surrogacy as parents in that category appear to suffer discrimination.
	When I first became involved in the matter I assumed, perhaps naively, that some form of adoption would be required, but there are several different methods of dealing with surrogacy. The Library briefing cites the submission to the Government's original consultation by the National Association of Schoolmasters Union of Women Teachers, which puts the matter very well:
	In these circumstances the commissioning mother usually has the baby soon after the birth but cannot formally adopt until six weeks after the birth. Clearly she will need to take leave from the date she receives the baby but currently she has no statutory rights to any pay or leave, even after the formal adoption.
	If that is indeed the case, the mother is in a disadvantaged position. Had there been no surrogacy agreement but only an adoption, she would have been entitled to rights under adoption regulations. However, because of the surrogacy she has no rights whatsoever.
	Various legislative proposals apply in surrogacy arrangements, and different means by which parental rights are given to the intended parents and the parental rights of the surrogate mother extinguished. As well as formal adoption, parental orders can be imposed, allowing a married couple who commission the surrogate birth to apply for an order so that they are treated in law as the parents of the child. That is not necessarily a quick process because, as in all cases that involve children, the court would have to be convinced that the welfare of the child was secure. Similarly, it may be possible for a commissioning father to apply to the courts for a parental responsibility order by virtue of the fact that he is the genetic father of the child. I am not sure of the position in English law, but in Scotland such an order would have to be accompanied by a residency order to specify that the child is to reside with the father and his wifethe child's putative mother. If that order was not granted, the original order would not do much good. In any event, the parental responsibility order would not give any automatic rights to the wife of the applicant. Even though she would almost certainly be the main carer, she would not necessarily obtain any benefit though time off or pay. Those procedures may not work as intended.
	It is particularly strange that that point has not been covered by the legislation as the legal frameworks for surrogacy and adoption are closely related. It is iniquitous that parents in a surrogacy arrangement should have no automatic legal rights, but must rely on their contract of employment. In my constituent's case that worked outit might not in other casesso I urge the Minister to reconsider the matter and ensure that all families are treated equally. After all, in his letter to hon. Members of 19 October, the Secretary of State specifically stated that the Bill would
	deliver our commitment to give parents more choice about how they balance their work and family life.
	That should be as true of those seeking a family through surrogacy as it is of those seeking a family through any other means. For the sake of fairness and completeness, I urge the Minister to re-examine the matter and introduce proposals to include such a measure in the Bill.

Kitty Ussher: I am pleased to have the opportunity to speak in this debate, Mr. Deputy Speaker. I add my name to those of other hon. Members who support the BillI believe that supporting this legislation is something of which we should all be very proud. The Bill provides legislative support for what we all know deep down to be true: all parents, regardless of gender, may want to spend time with their young childrenmany do. It is crucial to our fight against discrimination that it should be seen as normal for both men and women to take time off for a new baby.
	This evening, we have discussed whether the Bill will make it more or less likely that women of childbearing age will be discriminated against. The hon. Member for Mid-Worcestershire (Peter Luff) is no longer in his seat, but I note that he said that he has evidence of that practice taking place, in which case I hope that he will give it to the police.
	I am sorry that the hon. Gentleman is not here, because I wanted him to have the opportunity to withdraw his comment, which I found rather condescending, that we should have a drink and discuss the issues. A few minutes earlier, he did not even know my nameI wonder whether it is normal for him to invite ladies to go for drinks when he does not know their names.

Peter Bone: I do not know whether the hon. Lady knows that my hon. Friend the Member for Mid-Worcestershire (Peter Luff) is Chairman of the Trade and Industry Committee, which is probably why he was interested in her views.

Kitty Ussher: I thank the hon. Gentleman for that clarification. I am sure that the hon. Member for Mid-Worcestershire will mention it to me in person, if we ever discuss the matter.
	I believe that the legislation will reduce discrimination against women of childbearing age, because if more men of the same age act as role models by taking greater paternity leave, it will become normal for all parents to do so. That is one of the reasons why I support the Bill, which will help us move towards a culture in which all peoplemale and femalecan organise their lives to suit their caring responsibilities without fear of stigma in the workplace.
	I am in the unusual position of agreeing with something that the right hon. Member for Maidenhead (Mrs. May) saidshe said that the business case for the legislation is proven, which is true. Businesses will benefit by having higher staff retention if they make it easier through this legislation to allow their employees to balance their work and family commitments, and anecdotal evidence shows that productivity rises in such cases. They will also have access to greater talents not only among their existing employees, who will not have to leave their jobs when the time comes to look after their families, but among a larger pool of potential employees, because more people will want to apply for work, realising that they can more easily balance their work and family commitments.
	I particularly support the measures in the Bill that give greater parental rights to fathers, which the evidence shows that they want. An Equal Opportunities Commission survey conducted earlier this year found that two thirds of fathers intend to take up their paternity rights, and nine out of 10 fathers take time off when their children are born. Crucially, half of fathers say that the existing legislation is not sufficient.
	The Bill is good for men, but because it is good for men, it is potentially good for women, too. It will end the pernicious cycle by which young adults who form a couple and who are equal on the career ladder before they start a family inevitably end up in a situation in which the woman experiences a pay gap after the first or second child. At the moment, because only the mother can take a substantial period of time off when a child is born, it becomes financially logical for the father to work longer hours and seek promotion and for the mother to remain at home. Fathers often work harder when their child is in its first year until their pay rises. When the mother returns to work after six months or one year, a wedge has begun to be driven between the salary of the man and the salary of the woman.

Norman Lamb: I agree with what the hon. Lady is saying about redressing the balance between men and women as women become increasingly unequal as a result of time off relating to childbirth. Does she recognise, however, that the Government estimate in their regulatory impact assessment that it is possible that as few as 9,000 people will take advantage of the right to paid paternity leave because, at 106 a week, it will be uneconomic for many fathers to do so? Does she see some merit in giving a father, like the mother, greater flexibility in taking a shorter time than the maximum but with a higher weekly rate than 106?

Kitty Ussher: I do not favour that, because it would send out the wrong signal. We should either support someone on parental leave or not support them. I note the hon. Gentleman's general point. I hope that take-up by new fathers will be high, because fathers and families would benefit from that. However, it is not up to the Government to tell families how they should organise their lives. We should provide an enabling environment so that they can make the choices that work for them.
	The Bill will allow both parents to be equal at the end of the first year, if that is what they want. The mother can take the first six months off, during which time the father continues to work. The father can then take the second six months off while the mother returns to work to seek promotion opportunities and whatever else she wants to do. That is a wholly advantageous move that we should all support.
	I want to take my example a little further. Earlier, I asked the Secretary of State about a situation in which a woman wants to go back to work after three months. We should not force her to do so, but I can imagine many situations where she might want to, perhaps because she likes working or because she is in a sufficiently senior position in the organisation that she is genuinely worried that there will be negative business effects if she does not go backor, God forbid, she is a Member of Parliament whose constituents could not tolerate the idea of her having six months off. Colleagues will know that I have some experience of that.
	It would be wrong if the mother wanted to go back to work when the baby was three months old and the father wanted to take over but the legislation or regulations did not allow it. The mother would have to remain at home for the second three months to wait for the father to be allowed to take over, thereby damaging her business, or they would have to employ another form of child care for that period. It would be unnecessarily disruptive for the child if both parents wanted to share the year between them. When I mentioned that to my right hon. Friend the Secretary of State, he said that it was not favoured in the consultations. I have read those, however, and some groups did favour it, particularly Fathers Direct, which claims to speak for a large interest group on this matter and should not be ignored.
	Earlier, my right hon. Friend said that World Health Organisation guidelines suggest that women should breast-feed for six monthsso does the Department of Health, but it also recommends several other things including not smoking, not drinking too much, and eating five portions of fruit and veg each day. In the end, it is up to individuals to decide how they wish to interpret such advice. If the Government really think that women should breast-feed for six months, they should legislate to that effect, but I am sure that they do not think that women should be forced to do so. In fact, the Government have, I am proud to say, introduced regulations that require employers to provide areas where women can breast-feed orwithout troubling the House with too much technicalityexpress milk and so on. I therefore urge my hon. Friends on the Front Bench to consider as they consult further whether greater flexibility should be allowed on the matter.
	In summary, the Bill will transform the culture of our workplaces, and that is excellent. It will help to provide male and female role models to whom young parents can look when they decide how to balance their work and family lives. It will lead to less, not more discrimination. It will be good for small and large companies as they realise that the measure requires them to think beyond their existing talent pool. That is good for our economy and for families in this country.

Peter Bone: It is a pleasure to follow the hon. Member for Burnley (Kitty Ussher), who made such a powerful speech. I agree with many of her points. However, I hope to deal with matters that have been touched on only briefly in the debate.
	I read the Work and Families Bill with interest. It details how parents should have more choice through flexible working to create a better work-life balance. It advocates a longer period of paternity pay from 26 to 39 weeks from April 2007. It allows regulations to be made for additional statutory paternity leave and ties in with the Government's 10-year strategy for child care. That is all good and to be welcomed. However, the measure is incompleteit is half a Bill. It does not mention those mothers who want to stay at home to bring up their children. What about mothers who are forced back to work for financial reasons but would prefer to stay at home to look after their children?
	The measure is simply another Government initiative that will break down the family model, forcing parents to go out to work instead of giving them the genuine choice of looking after their children at home. It is a proven fact that children do better when they are brought up in a family environment and even better when one parent is at home to give them constant care and attention in the early years of their lives.
	I have run the Listening to Wellingborough and Rushden campaign in my constituency for many years. It aims to seek the views of local people, groups and organisations and campaign on their behalf for change. I listen to people through surveys, public meetings, door-to-door canvassing and visiting local residents. Throughout the time that I have run the campaign, the length of maternity pay, paternity leave or flexible working has never come up. However, families' concern about the amount of tax that they have to pay comes up all the time. They are concerned about the detrimental effects of the inefficient and inconsistent tax credit system. They are worried that they would be financially better off if they lived apart.
	The Government are determined to get parents back to work as soon as possible after a birth. They have now realised that they need to extend maternity and paternity leave. However, they still believe that, after a few monthswhether nine or 12parents should return to work. They have given no thought to mothers who decide not to work but to bring up their children.
	Many parents are frustrated because there is no option to stay at home in the early years of their children's lives. I must declare an interest. I have a son, Thomas, who is nearly five years old. I also have two older children who are 23 and 21. My wife has spent time at home to bring them up. She returned to full-time working only since Thomas started school. As with our other two children, Jennie and I believed that it was vital that she was with them in the early years. We were in a position to do that, but the Government have ensured that that is not an option for most families in our country. Such woolly-minded, liberal thinking will lead to disaster.
	The Government's desire to control everything, whether through their nought-to-five curriculum, their insistence on getting children into school as soon as possible or the pressure on mothers to go back to work, constitutes nanny-state, centralist intervention. It is socialist planning that might go down well with Labour Back Benchers, but it is not good for 21st century Britain. It has more in common with the state planning of the former Soviet Union than with a modern, 21st-century country. When will the Government trust families and allow them personal responsibility? When will they allow children to be brought up by their parents, rather than by the state?
	I have no illusions; we are living in a changing world, and work and family life are very different from what they used to be. I completely understand that many women now choose to pursue a successful career, and that should be welcomed. However, my concerns rest with those women who want to be full-time mothers. The Government have removed the choice for such women to stay at home and bring up their children.
	The Government have also discriminated against the family by introducing measures that benefit couples living apart. In a recent report published by the charity Care, the tax credit system is blamed as one of the drivers forcing mothers out to work even if they would prefer to look after their children at home. The Government do not regard running a home and bringing up children as a worthwhile career option. They do not believe that it constitutes work, let alone hard work. If Ministers were to spend a few weeks trying to run a home and look after two young children, there could be a rapid rethinking of Government policy.

Gerry Sutcliffe: I do not want the hon. Gentleman to run away with the idea that Ministers do not have parental responsibilities. I have three boys, and I also have three grandchildren. I am well aware of the roles that parents and grandparents can play.

Peter Bone: I am grateful to the Minister for that comment. However, if he had had to bring up those children at home, rather than working in the House of Commons, he would understand that it was actually rather hard work. When my wife was bringing up our first two children and I was working away from home, she was working exceptionally hard on something that was of great benefit not only to our family but, ultimately, to the nation.
	The balance has now swung so far in favour of making people go out to work that there are huge financial disadvantages for the traditional family. The Care report examined 74 couples, and found that 64 of them would have been better off financially if they lived apart. It also showed that, on average, a couple lost 58 a week by staying together rather than living apart. One of the families studied, with average earnings of 25,000 a year, would gain 206 a weekyes, 206 a weekby splitting up. Where are the incentives in the Bill to keep families together? Children will always do better if they are brought up in a loving and secure family environment. I am not saying that financial reasons are the only factor involved when a couple split up, but they certainly play a big part.
	The tax credit system is, by its very nature, flawed. Since coming to Parliament in May, I have been inundated by worried constituents who have been victims of a system that is so ambiguous and complicated, with so many forms to be filled in, that many of them have been penalised. Let me give the House a specific example. I have had a mother crying in my office, fearful that the family would have to sell their home because they had had their tax credits stopped and had received a demand from the Inland Revenue for thousands of pounds in overpaid tax credits. When I looked at the situation, I found that my constituents had done nothing wrong; it seemed to be a gross error by the tax credit office. However, that did little to relieve the despair and hurt caused to my constituents by the tax credit system.
	The problem with this Government is that they believe that all mothers want to return to work for a career. They do not even consider the possibility that some mothers want to stay at home to bring up their children; that is not in their psyche. The Bill is only half a Bill; it addresses one issue but totally ignores the other.

James McGovern: It is a pleasure to speak in this debate on a welcome and important Bill. The research paper suggests that it has come on the back of a raft of policy documents and consultation papers. I am delighted that it also comes on the back of a manifesto commitment that came via the Warwick agreement, and I am glad that the Government are pursuing it so early in this Parliament. I look forward to seeing more manifesto commitments with regard to the Warwick agreement, such as an end to two-tier work forces and increased protection for migrant workers. One step at a time

Jim Devine: Is it not embarrassing that in this place we have a two-tier work force for domestics, one of which is employed by this place and earns a good salary, while the other is employed by a private contractor and is clearly being exploited?

James McGovern: I agree with my hon. Friend entirely. I am against two-tier work forces, regardless of where they exist, and the sooner we get the situation sorted in this place, the happier I will be.
	The Bill is crucialI am afraid that I must use the jargonto the work-life balance in the 21st century. A recent ICM poll suggested that three out of five women today believe that it is more difficult for them to attain an acceptable work-life balance than it was for their mothers 30 years ago. Obviously, there are a number of reasons for that, not least of which is that many more women are working now than 30 years ago. I welcome the progress that the Government have made on variable working hours, job shares and part-time working, but there is much more to be done. I also want to remind the Minister that flexible working is not sustainable without addressing the pensions issue. In the light of last week's Turner report, I hope that any future debate on pensions will take due cognizance of the pension rights of women and carers.
	Any Bill that will provide extra flexibility in relation to the period for which women can take maternity leave and in relation to fathers taking paternity leave must be welcomed. Obviously, the way in which families have been viewed in the context of work has undergone a massive sea change in the past 40 years. Again, there are many reasons for that. All too slowly, but at least surely, women have gradually gained more rights in the world of work.
	My older sister was born in 1955 in a hospital in Dundeeunfortunately, the hospital is no longer there. My father went to work as normal that day. When I was born 14 months later in a hospital in Glasgow, my father again regarded it as a normal working dayhe had toand went to work. Five years later, when my mother was again due to give birth, she decided, to coin a phrase, on a home delivery, and my father had to take the day off work, because he had to look after my sister and me. While my father, Tommy, my sister, Carol, and I sat in the kitchenwe were living in what was known as a room and kitchen in Maryhill road, Glasgowmy mother, ably assisted by our GP, Dr. John Fitzsimmons, who, incidentally, was also the Celtic football club doctor at the time[Interruption.] I think that my hon. Friend the Member for Livingston (Mr. Devine) comments from a sedentary position that that explains a lot. [Laughter.] My mother, ably assisted by Dr. Fitzsimmons, gave birth to my younger sister Angela, and my father had to take the day off, but simply lost a day's wages.
	The hon. Member for North Norfolk (Norman Lamb) said that in those days the man was expected to be the breadwinner, and the woman was expected to stay at home and look after the children. That was certainly how my father viewed it, and I am slightly ashamed to say that I do not think that his view has changed much since then. Obviously, however, as in most father-son relationships, we agree to differ on certain issues. I am glad that the days when women were regarded as going out to work for pin money are long gone. In most cases, women's work is now a requirement.
	There are many reasons why a man would want to take paternity leave, and evidence seems to suggest that many men take their annual leave in the first few months of a baby's life. Obviously, that is not just to get to know the baby but to support the mother. There is also evidence that at least 20 per cent. of women suffer some sort of post-natal depression, so I would regard it as the father's right to be with the mother and the child at that time, and I hope that that can be considered. I am not sure whether I made myself clear in intervening on my right hon. Friend the Secretary of State in his introductory remarks. However, many contributions since then seemed to confirm what I was trying to say. If a father can take paternity leave only on the second sixth months of the first year of the child's life, and that is dependent on the mother returning to work, that puts undue pressure on the mother to return to work, perhaps earlier than she would otherwise wish. I hope that the issue will be clarified when the Front Bench spokespersons respond. If the mother were allowed to take her additional maternity leave for the second six months and the father were allowed to take paternity leave, that would be a better proposition. My preferred option is that, if they so choose, both parents should be allowed to take their maternity and paternity leave concurrently, during the first six months of the child's life. If we are legislating for choice, surely we should not deny both parents the choice to be with the new addition to the family in the earliest stages of its life.
	Discrimination has been mentioned. The hon. Member for Mid-Worcestershire (Peter Luff), who is no longer in his place, envisaged paternity leave being talked up to the same level as maternity leave, resulting in women no longer experiencing discrimination because they were of child-bearing age. I agree with the hon. Gentleman on that. I think that that is desirable, but I am not sure that he would agree with me. I do not think that that is the point that he was trying to make.
	I welcome the provisions that deal with redundancy. Before being elected to this place, I was a full-time trade union official. I dealt with numerous instances of long-serving employees being denied equal redundancy packages because they were six months over the age of 64. Anything that would remove such blatantly unfair practices is welcome.
	Mention has been made of the eight statutory public holidays being added to the minimum of 20 days' annual leave. I ask my hon. Friend the Minister to re-examine that. Some employers do not recognise public holidays. Employees of such companies will find that the change in the legislation will mean nothing to them. Perhaps my hon. Friend will consider two options. We can move to 28 days' minimum annual leave or we can add eight public holidays as a legal entitlement to the 20 days of annual leave; otherwise, there will be a large loophole.
	The hon. Member for North Norfolk (Norman Lamb) mentioned the CBI's desire to see extra days phased in over a period. As a former negotiator, I feel that if we closed the loophole on bank holidays, we could accommodate the CBI in phasing on the basis of two days each year.
	I welcome the Bill. I ask right hon. and hon. Members to support it. I look forward to it being debated again early in the new year.

Madeleine Moon: It is a great honour to follow my hon. Friend the Member for Dundee, West (Mr. McGovern), especially with his story of his father's management of the birth of his sister. Only recently, I had a discussion with my mother, who is 91. I talked about the birth of my younger sister and of overhearing my father saying to his employer over the telephone that he could not come into work because I had been misbehaving. He said that I had been behaving very badly following the birth of my younger sister. I told my mother that I had been shocked to hear that call. I had been given a wonderful present of some whimsies and I thought that I had been behaving well.
	At 87, my mother told me rather belatedly, Good grief, you were not behaving badly. It was just an excuse to get him off work because I needed him at home to look after you. We did not have all this leave in those days and your father had run out of his leave. For years, people had been lying to employers, managing employment situations and falsely creating impressions to manage family responsibilities. It is ludicrous that we lived in that world.
	Last night, I watched Ian Hislop, who appeared in a programme about the way in which the role of women in society was changed by the great war, when they were needed to take on jobs and responsibilities because men were at the front. Years of suffrage had not secured women the vote. The experience of seeing how women rose to the challenge of the workplace led to suffrage being extended to women. That extension of suffrage changed British society. I see the Bill as being very much part of another great change that is taking place in British society. We need to recognise that parents and carers are critical to our future, and that as a society we should support them.
	We heard from the hon. Member for Wellingborough (Mr. Bone) that the Government were trying to force women into the workplace. There is an element of truth in what he said. We have a falling birth rate. We have a falling number of people in the pool of those available to work, because we have high levels of employment. We have an ageing society, and an increasing number of people need care and support. If we are to provide for those who want to work, those who need to work and those whose lifestyles have been limited by poverty, social isolation and caring responsibilities, we must engage in a new way of working. We must engage in a new relationship between society and working people, be they parents or carers of older people. We need to build into our work force regulation both flexibility and choice.
	Last week I was in the Chamber debating the Childcare Bill, which recognised the importance of quality-based care for children, parents, employers and Government. Speaker after speaker acknowledged the importance of parents' spending time with their children in the early years. The Bill introduces a change in maternity and adoption pay, which will enable parents to remain at home for 39 weeks by April 2007. The goal of eventually providing a year's maternity leave is one that we should all embrace and welcome.
	I ask the Minister, however, to consider a possible change. If we are to support the 61,000 people who adopt children each year, we must ensure that maternity pay and adoption pay are of equal value, recognising that the role that they play as parents is equally important. Statutory maternity pay is currently 90 per cent. of salary for the first six weeks, and 106 a week for the next 20 weeks. Statutory adoption pay is 106 a week for 26 weeks. I should like the first six weeks of statutory adoption pay to be 90 per cent. of salary, which would bring it into line with maternity pay and send adopters a clear message that their financial recognition as parents is equal, like their status in law.
	I welcome the change that allows parents, particularly mothers, to return to work for training or appraisals while receiving maternity or adoption pay. For adopters in particular, a placement may be sudden. They and their employers must have time to adapt to their leave to take on child care responsibilities. That flexibility and choice is imperative for natural, birth parents and for adoptive parents.
	I do not want to be seen as the Member of Parliament who always quotes from The Western Mail[Hon. Members: Oh, go on.] It is too late. Last week, The Western Mailevery Welsh Member's morning readingreported that, according to the Equal Opportunities Commission in Wales, many women in Wales are still affected by poverty, isolation and exclusion. David Rosser, director of CBI Wales, admitted that women still dominate in child care responsibility, and that until men take equal caring responsibility in society, that will prove difficult to address. In 2005, we are still talking about women having a disproportionate experience of poverty, isolation and exclusion.
	Paternity leave was the first step of both Government and society to move towards giving men equal caring responsibilities. I hope that we can introduce changes to make the two weeks' paternity leave more family friendly. Too many fathers are excluded from paternity leave because of the need to give 15 weeks' notice, which employers do not really need. Fathers can take paternity leave up to eight weeks after the birth. However, a father's support and care may be more appropriate later than eight weeks after the birth. The child may become ill. The mother may remain ill in hospital. As we all know, doting grandparents flock in after the birth. It may be more appropriate for the father to be around later on. Perhaps we could look at breaking down the two-week period into two separate one-week opportunities for a break. It would create no additional costs for employers, give employers and families greater flexibility and could be of far greater value to families.
	In the Childcare Bill debate, I spoke of how families with children with disabilities are one of society's most disadvantaged groups, with 55 per cent. living in poverty, in serious debt and with both parents and children living in loneliness and social isolation. That picture of poverty and isolation can be extended to most people with caring responsibilities. I welcome the Bill's extension of the right to seek flexible working to all carers and adults. However, I believe that that right should be extended to cover all children until they have left school. As all parents know, children need the support of their parents at different stages of their lives. A child could be going through a period of illness, of difficulty at school or that most difficult of periods, adolescence, when they need a parent at home to give them the support and structure to guide them through that difficult process. If we do not have that flexibility, we are not building in the support that families, children and parents need.
	There are 6 million carers in the United Kingdom, 3 million of whom are working, who will welcome the opportunity that the Bill provides to tackle the stress, social isolation and, for many, the poverty created by caring. The peak ages for becoming a carer are 45 to 64. Eighty per cent. of carers fall within that working age band. Their experience, skills

Mr. Deputy Speaker: Order. The hon. Lady has had her 10 minutes.

Eleanor Laing: To finish the sentence of the hon. Member for Bridgend (Mrs. Moon), it is likely nowadays that someone may be a carer and a parent of young children at the same time. It is a serious matter that we must all recognise.
	We welcome the intention of the Bill and we want it to work but we have, of course, some concerns about its detail. There are two points in particular. First, the Bill must be kept simple. If it leads to an explosion in red tape and bureaucracy and extra rules for businesses of all sizes and for employees as well as employers, it will not work because people will not have confidence in it. Secondly, we do not want the pendulum to swing so far that the Bill becomes counter-productive. As some of my hon. Friends have mentioned, it would be wrong if rights were created that required so much of employers, particularly small businesses, that they were unwilling to employ people who had family duties, particularly young women of child-bearing age. If that were to happen, and I hope that it does not, the Bill would backfire and it would not work. We want it to work. In everything I say, I want to ensure that the Bill is improved, so that those concerns are taken care of and the legislation will work.
	As my right hon. Friend the Member for Maidenhead (Mrs. May) said earlier, the economic case for such a measure is proven. In today's work force, for the economy to work with maximum efficiency, it is absolutely necessary that every single person who is willing and able to work, and who has the experience and talent to do so, is able to use their abilities to their fullest extent.
	Unusually, the Minister for Women and Equality, the hon. Member for Sheffield, Heeley (Meg Munn), is not here, although I am not surprised, given the burden of legislation that she has had to deal with in the past few weeks. I pay tribute to her for bringing to light a fascinating statistic, which I have mentioned several times in recent weeks in this Chamber and in Committees considering similar legislation. If all the women in the UK work force were working at the height of their capacity and to the best of their talentsinstead of taking jobs of a lower standard because they want to work part-time; or taking a career break and subsequently being unable to slot in at their previous levelour gross domestic product would improve by 3 per cent. That is a stunning statistic: 3 per cent. of GDP is equal to our annual trade with Germany. That is an enormous sum and I am sure that the Chancellor would welcome such an improvement, given the awful figures that he was forced to announce to the House today. That said, I stress that we want this legislation to work.
	The hon. Member for Bridgend made a very good point about people often having to tell white lies, let us say, in order to cope with a situation about which they should not have to tell lies. When I discovered last week that the Bill was to be given its Second Reading today and that I would have the great honour of winding up for the Opposition, I had to change some of my arrangements for this evening, which had included attending a very worthwhile charity event. I also had to change arrangements with my nanny, who looks after my small son. I told her this morning that unfortunately, I would be unable to go to the ball because I had to be here this evening, and she said, Can't you just call in sick? I had to explain that it does not work that way here, but at that point it occurred to me that, of course, that is what people have always done. People call in sick when in fact, if the employment arrangements were reasonable and flexible, there could be far more honesty, and both employer and employee could be above board about what is actually going on.
	The hon. Member for Bridgend told a very good story about her father, but my hon. Friend the Member for Newbury (Mr. Benyon) takes the prize in this regard. Just a few weeks ago, his wife gave birth toa child. [Interruption.] My helpful hon. Friends tell me that it was a boy: my hon. Friend the Member for Newbury has a new son. Unlike my hon. Friend the Member for Buckingham (John Bercow), who had to explain to the Whips in rather difficult circumstances that he intended to take paternity leave, my hon. Friend the Member for Newbury simply fell over on his way out of the hospital and broke his leg. [Interruption.] I am inaccurate in that as well; apparently, he broke his foot, as my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) helpfully points out. The principle is that it should not be necessary for people to find excuses to be there for the first few weeks of their child's life, whether they are the mother or father.
	We have had a constructive debate this evening. The hon. Member for Erewash (Liz Blackman) spoke passionately about carers and she was right to highlight the predicament of parents who have children who are in need of extra care but who may not be categorised as having special needs. They may still have extra needs that should be taken into consideration as far as their parents' employment is concerned. The hon. Member for North Norfolk (Norman Lamb), who spoke on behalf of the Liberal Democrats, was right to talk of the need to get the work-life balance right. I hope that that term has not become jargon, because it is important. We are trying to achieve a reasonable balance and, for once, I did not disagree with everything that the spokesman for the Liberal Democrats said. We may have a constructive time in Committee.
	The hon. Member for Warrington, North (Helen Jones) is right about the business case. She made a good case that was similar to what my hon. Friends and I have said, so I do not understand why she claims that the Opposition are unsupportive of the Bill. We welcome these provisions. She has listened to a small number of   my colleagues, but not to me. Nor has she listened tomy hon. Friend the Member for Bromsgrove (Miss   Kirkbride), who made a powerful speech. She understands these issues very well and she is right to have spent some time with her son this evening. We forgive her for not having been here for the whole of the debate, because that is what she was doing.

Julie Kirkbride: I am sure that my hon. Friend would like to know, as a good friend of my right hon. Friend the Member for Bracknell (Mr. Mackay), that before I got home, bath and tea had been provided, by someone who is not noted as a new man. Jimmy-jammies were on and it was straight to bed.

Eleanor Laing: I am amazed and gobsmacked. The Bill has already had an effect if it has made my right hon. Friend the Member for Bracknell (Mr. Mackay) deal with putting his son to bed. I am extremely impressed.

Peter Luff: I have to let my hon. Friend into a secret. My right hon. Friend the Member for Bracknell (Mr. Mackay) has already expressed his pleasure that the Trade and Industry Committee intends to visit India a week after his Committee goes elsewhere, so that he can look after the baby while his hon. Friendin every sense of the wordthe Member for Bromsgrove (Miss Kirkbride) is away. He is really becoming a new man.

Eleanor Laing: I am not sure that my right hon. Friend the Member for Bracknell will be pleased to be called a new man, but he is clearly becoming the perfect father, and we should all commend him for that.

Jim Devine: Is it not silly to be talking about work-life balances when we are sitting here at half-past nine at night?

Eleanor Laing: The hon. Gentleman makes a good point, but each hon. Member has a different hour at which they want to be somewhere else. The fact that I want to be at a charity ball right now is not the point[Interruption.] I am not used to playing Cinderella. The time that mattered most to me was 7 o'clock, just before my hon. Friend the Member for Bromsgrove left the Chamber having explained what she was going to do. I could not, of course, take that amount of time away from the debate, so I had to telephone my four-year-old son to say goodnight. As always, he asked me what I was doing and I said that I was about to make a speech at Big Benas he calls this place. He asked what the speech was about and I replied that it was about mummies having more time to spend with their children. He said, Great, so you'll be able to come home and read my story then. That makes extremely well a point that others have made.
	It annoys me that just because Conservative Members speak up for small businesses and analyse the economic effect of proposals such as these, some Labour Members suggest that we do not understand the needs of children and families as much as they do. We do.

Charles Walker: I am very much a new man. Indeed, it was my daughter Charlotte's ninth birthday today and I managed to get home to south Hertfordshire for 45 minutes at 4.30 pm to wish her a happy birthday, so I am in favour of the work-life balance.

Eleanor Laing: I am most impressed, although I will not encourage any more of my hon. Friends to display their new man credentials. The Bill has already had an effect.
	The hon. Member for Cardiff, North (Julie Morgan) made a powerful speech about carers. She is absolutely right and we should pay attention to her example. It is worth looking further at whether the right to request should be extended to all employees. It is difficult to work out where the line should be drawn. I make no commitment to the Minister about exactly what our position will be, but the matter is certainly worth considering.

Gerry Sutcliffe: rose

Eleanor Laing: I will of course give way to the Minister as long as he understands that my speech will go on longer due to interventions.

Gerry Sutcliffe: I am grateful to the hon. Lady for giving me the opportunity to intervene. I am sorry that she has missed the ball, as she has mentioned twice.
	The hon. Lady is making an important point about the extension of the right to request and the work-life balance, and I welcome what she says, but we have been told by Opposition Members about the role of business and the CBI, so is she committing her party to supporting an extension of the right to request, even though organisations such as the CBI are opposed to it?

Eleanor Laing: No. I am glad the Minister asked that question. I am not committing my party to anything; I was saying that it was worth looking at the point further. I am not ruling it out. It would be just as easy for me to say, No, we absolutely rule it out, but we do not. The hon. Member for Cardiff, North made some important points and I hope that we shall have an opportunity to consider them further in Committee.
	My hon. Friend the Member for Mid-Worcestershire (Peter Luff) was right to stress the importance of the balance between employees and employers. He made the important point that just because discrimination against women is illegal does not mean that some employers will not find a way around the law. That is what lawyers are for, so I stress again the importance of keeping the legislation simple and balanced.
	My hon. Friend the Member for Hertford and Stortford (Mr. Prisk) put well the case for small businesses. It is vital that the Government respect their position. After all, most employees work for small businesses.
	The hon. Member for Plymouth, Devonport (Alison Seabeck) was right in what she said. I do not disagree with the detail of the contributions made by Labour Members. We are all trying to achieve the best from the Bill and I hope that we can go into it in more detail in Committee.
	The hon. Member for Angus (Mr. Weir) raised an issue that the Government had not taken into consideration: surrogacy. I hope that we can amend the Bill in Committee to take account of what he said. It is right that a child born of a surrogate mother should be treated appropriately, not exactly in the same way as the child of a birth mother or an adopted child, but not left out of the provisions altogether.
	The hon. Gentleman also addressed the issue of enforcement through tribunals. We do not want to encourage more litigation as a result of the Bill. It is much better to have reasonable, balanced law that need not be broken by either side.
	The hon. Member for Burnley (Kitty Ussher) also speaks with authority, because she probably has the youngest child of any female Member.

Kitty Ussher: I understand that my hon. Friend the Member for North-East Derbyshire (Natascha Engel) had her child first.

Eleanor Laing: The hon. Lady speaks with authority on this matter because she has a very small baby, and it is quite understandable that she will not have time to discuss any matter with my hon. Friend the Member for Mid-Worcestershire because she cannot possibly have time while balancing her duties in the House and in her constituency with such a small baby.
	My hon. Friend the Member for Wellingborough (Mr. Bone) mentioned some vital aspects of the Bill. Parents' time with children is an essential part of helping to create and nurture children and therefore the next generation. Parents who have jobs are doing two jobs, especially the mothers of small children who also have a job outside the family, and we should respect that fact, but my hon. Friend is right: looking after a home and children is an important and extremely hard job. In my own humble opinion, it is the hardest job that there is, and I am glad that I do not have to do it full-time. We must respect women who choose to stay at home and look after their families. They must also have rights.
	The hon. Member for Dundee, West (Mr. McGovern) gave us a very good historical canter around what used to happen. I am glad that we live in more enlightened times.
	Much of the Bill is reliant on subsequent regulations that we have not yet seen. This is the third Bill in a month to which I have spoken from the Dispatch BoxI assume therefore that this must apply to many morefor which there has been a very short period, usually eight days, between the debate on Second Reading and the beginning of consideration in Committee and for which the Committee stage will be commenced too early and be rushed. We have had to examine Bills in Committee without the benefit of having the regulations before us. I hope that that will not happen with this Bill. It is hard to imagine why the Government are in such haste to push the Bill through. Another couple of weeks so that we could have the regulations in front of us to give the Bill proper consideration would have been much better.
	In conclusion, we all want the Bill to work, so it must have flexibility and balance between employer and employee because we have jobs to talk about in the context that we have been discussing them this evening only if we have a successful economy, and we have a successful economy only if we have competitive businesses. So if anything in the Bill undermines the competitiveness of businesses, the Bill will backfire. I do not want that to happen; I want the business community and families to have confidence in the legislation that we have examined this evening. We want to examine the Bill further in Committee. We therefore want it to have a Second Reading. We will not oppose it this evening, but we look forward to improving it.

Gerry Sutcliffe: I have listened with great interest to the contributions of hon. Members from both sides of the House. We have heard contributions from the right hon. Member for Maidenhead (Mrs. May), the hon. Member for North Norfolk (Norman Lamb), my hon. Friends the Members for Warrington, North (Helen Jones) and for Cardiff, North (Julie Morgan), the hon. Member for Mid-Worcestershire (Peter Luff), my hon. Friend the Member for Kingston upon Hull, North (Ms Johnson), the hon. Member for Hertford and Stortford (Mr. Prisk), my hon. Friend the Member for Plymouth, Devonport (Alison Seabeck), the hon. Member for Angus (Mr. Weir), my hon. Friend the Member for   Burnley (Kitty Ussher), the hon. Member for Wellingborough (Mr. Bone), my hon. Friends the Members for Dundee, West (Mr. McGovern) and for Bridgend (Mrs. Moon) and, latterly, the hon. Member for Epping Forest (Mrs. Laing).
	All hon. Members who have contributed to the debate understand what the Government are trying to achieve through the Bill. The Government have clearly set out their strategy in their three terms and they will develop it further in their fourth. Given the legacy of the previous Government, our first term was about getting people back into work. The second term was about fairness at work and getting the balance of fairness in the workplace right. The third term has been about the world of work.
	All hon. Members who have spoken in the debate have said that the world of work has changed dramatically. This country faces demographic changes due to a reducing birth rate and the fact that people are, thankfully, living longer. We need to ensure that we get as many people back into work as possible. I was grateful and delighted that the Conservative Front-Bench spokesmen said that the business case had been made for the Bill because it is right and proper that that is the language in which we talk.
	All hon. Members agree that every child deserves the best possible start in life. The Bill attempts to achieve that by providing more choice and flexibility for families when balancing work and caring responsibilities. However, as my right hon. Friend the Secretary of State said, the Bill includes measures to help employers to manage the administration of leave and pay and to plan ahead with greater confidence and certainty. It will enable better interaction between parents and employers, which was surely the point that the hon. Member for North Norfolk made when he said that it was important to get employers and employees to sit down together so that they can work through the needs of the business and their own needs, too.
	That is the context of the different style of approach on employment relations in this country that the Government have tried to introduce. We have tried to move away from the adversarial times of the 1970s and 1980s and towards more consensus. We face global challenges and demographic changes. There is a need for employers to understand the needs of their employees because the labour market is tight, more people are in work than ever before and we have such a low level of unemployment. However, employees must also understand the needs of business because they can change due to globalisation. The business case for the Bill has been made and it is important that there is a new regime of understanding by both employers and employees.
	We all know that enabling people with caring responsibilities to work means that the UK economy benefits and that employers can recruit from a wider talent pool and retain the people in whom they have invested. The Bill will not only result in more choice and flexibility for families, but help to achieve greater equality by enabling men to spend more time caring for their children and encouraging women back into the workplace.
	Many people have put their credentials as new men or women on the table, so I will put my credentials on the table. I am a parent of three boys and I have three grandchildren[Hon. Members: Surely not.] I know that it is hard to believe. I was thus a little taken aback when the hon. Member for Wellingborough said that Ministers do not understand the needs of youngsters and children and the requirements when bringing them up. I accept that some women make the choice to stay at home and bring up their children. Indeed, some men now want to stay at home to look after their children, especially in the first year of their lives. As the whole House has agreed, there is a benefit if people are with their children during those first 12 months.
	The package is good news for working parents and employers. It represents a big step forward on giving children the best start in life and enabling all families to have genuine choices about how they balance their work and family caring responsibilities. The changes will support employers in recruiting and retaining the best people, thus keeping much needed skills and experience in the workplace. In February, we published the consultation document Work and Families: Choice and Flexibility and consulted widely on how to take forward the commitments set out in our 10-year child care strategy.

Julie Kirkbride: I hope that the Minister will address the point made by Conservative Members about flexibility and allowing womenor men, for that matterto double up or increase the amount of money that they get a week by reducing the amount of time that they take off work. Will the Government consider that proposal?

Gerry Sutcliffe: I hope to come on to that point later in my speech. However, we do not accept that the proposal that the Tories put forward at the last election would have been of any benefit to either employees or employers.
	We consulted widely on choice and flexibility. Our aim was to establish and maintain a balanced framework of rights and responsibilities for both employers and employees. As well as providing more choice for employees, we are introducing measures to ease administration burdens for business in line with the Government's better regulation agenda.
	The majority of the costs fall to the Government, as the Treasury reimburses business for statutory maternity, adoption or paternity pay at 92 per cent. for large businesses and 104.5 per cent. for smaller businesses. That is worth around 390 million a year. The net cost to business of the package is small once we take into account the savings and the increased productivity as a result of the measures. It will be about 40 million to 90 million in year 1 and 35 million to 70 million in year 2.
	Throughout the consultation, we considered how we could help business to offset administrative burdens in line with the Government's better regulation agenda. We set up an external advisory group, made up of people with human resources expertise, to examine how to ease the compliance for employers. As a result of the Bill and subsequent regulations, the notice that mothers must give to their employers when changing the date of their return from maternity leave will be doubled from four weeks to eight weeks, and statutory maternity pay will start on the same day as maternity leave and be calculated on a daily basis, if that suits employers, to ease administration and align payments with employers' usual business practice.
	Women will be able to come into work for a few days during their maternity leave without losing a week's statutory pay and can end their leave early if that is what they and their employer want. That will help them to keep in touch and to ease their return to work. Again, many hon. Members accepted that. It will be explicit in the maternity leave regulations that employers may make reasonable contact during maternity leave. We will improve the guidance provided to employers and employees.

Norman Lamb: The Minister mentions regulations. I am sure that he is about to get to it, but will he confirm precisely which of the regulations will be subject to the affirmative process rather than the alternative?

Gerry Sutcliffe: Perhaps the hon. Gentleman will let me make my own speech and get to those points when I can.
	We have had a great deal of dialogue on the Bill. It is not a case of pulling something out of thin air. We consulted a range of stakeholders, including employers, both large and small. Only my hon. Friend the Member for Dundee, West mentioned the role of trade unions. It is important that we have full buy-in from both sides of industry in ensuring that the Bill's contents are supported.
	The right hon. Member for Maidenhead broadly welcomed the Bill, as did the hon. Member for Epping Forest. However, actions speak louder than words. The hon. Member for Bromsgrove (Miss Kirkbride) said that had there been a Conservative Government in 1997, they would have eventually got around to measures on work and families.

Patricia Hewitt: Eighteen years was too soon for that.

Gerry Sutcliffe: It took the Conservatives a long time to get anywhere, and they did not get to the stage of benefiting working people.
	We have ensured that there is the opportunity for broad consensus on the measures because of the change in economic circumstances and the need to get people back into work, if that is what they want to do. The right hon. Member for Maidenhead said that we should have put the provisions alongside the measures in the Childcare Bill that has come from the Department for Education and Skills. She will know that the scope of the Bills is different. The Opposition would have attacked us for not taking into account the interests of business had we put them together. She will understand why there is a separate Bill and why we need to look at it in detail.
	The Bill sets out minimum standards. The reality is that most good employers already see the business case for ensuring that their employees are well treated and that they retain employment. Surely the Government's role is to set out a series of minimum standards so that people do not fall below what is expected.
	My hon. Friend the Member for Erewash (Liz Blackman) was grateful for the Government's work on the role and value of carers. She raised a particular issue on the definition of carers. As my right hon. Friend the Secretary of State said, we will consider that in great detail and ensure that we listen to hon. Members on both sides of the House and to the various bodies that need to give us their view on what the definition should be. We need to balance the responsibilities and rights of employers and employees.
	The point was made that some employers will not employ women of childbearing age. That is a disgrace. We need to highlight the bad business sense of doing that and ensure that people know that it is illegal to discriminate in that way.
	My hon. Friend the Member for Warrington, North welcomed the Bill and asked whether the bank holiday entitlement would be paid. Our manifesto commitment was that bank holidays should be an additional, paid entitlement. She also asked us to consider what should happen in the tragic cases in which the mother dies after childbirth. I shall do that and I shall be interested to hear what my hon. Friend and others have to say about what we can do in such circumstances.
	Unusually, the hon. Member for Bromsgrove welcomed the Government's progressive policies on work and families, but she asked for more flexibility in maternity leave. She explained the role of management and middle managers, who have to understand the need for maternity leave and for good employment practices to ensure that people are looked after. She asked about the changes to employment law relating to a replacement employee who might be in place for up to 12 months. She said that that person would get employment rights and asked what their situation would be. Clearly, a contract would be entered into at the outset of the replacement explaining the reasons for that period of employment.
	My hon. Friend the Member for Cardiff, North also asked about the definition of carers. She gave a moving account of how she cares for her 94-year-old mother, with the help of an army of carers, mainly women. She made an important point about the way in which caring responsibilities affect carers' ability to advance their careers, or to obtain employment in the first place. She acknowledged the success of the Employment Act 2002, but also raised important issues relating to sleep deprivation and other factors that affect the work-life balance.
	The Chairman of the Trade and Industry Committee, the hon. Member for Mid-Worcestershire, spoke of his experience as the son of a single mother, commonly known as a latch-key kid. He emphasised the balance that we have to strike between the role of the employer and the role of the employee. He read out a list of things that he said are contributing to a lack of competitiveness in the job market by cumulatively putting a burden on business. The most notable item on that list was the national minimum wage, although he repented of having voted against the National Minimum Wage Act 1998. Good businesses want to ensure that they are not at a disadvantage compared with bad or rogue employers, and our debate has focused on what good employers should do and on ensuring that they are not disadvantaged because poor employers do not do those things. That is why the legislation is important.
	The hon. Member for Hertford and Stortford was scathing about the fact that the Government have not taken into account the costs of the Bill. He wants us to delay its implementation, but that is not appropriate. We have tried to ensure that the costs are reflected in the regulatory impact assessment and I am sure that the details will be examined in Committee.
	A range of detailed issues have been raised this evening, and in the time allowed I cannot answer all of them. However, as is my wont, I shall write to hon. Members on those detailed issues. I know from previous experience that we will have the opportunity to discuss them in Committee. The good thing about tonight is that we have had the opportunity to discuss the Bill in the round. I commend it to the House.
	Question put and agreed to.
	Bill read a Second time.

WORK AND FAMILIES BILL (PROGRAMME)

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(6) (Programme motions),
	That the following provisions shall apply to the Work and Families Bill:
	Committal
	1. The Bill shall be committed to a Standing Committee.
	Proceedings in Standing Committee
	2. Proceedings in the Standing Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 20th December 2005.
	3. The Standing Committee shall have leave to sit twice on the first day on which it meets.
	Consideration and Third Reading
	4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
	5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
	6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.
	Other proceedings
	7. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.[Tony Cunningham.]
	Question agreed to.

WORK AND FAMILIES BILL [MONEY]

Queen's recommendation having been signified.
	Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a) (Money resolutions and ways and means resolutions in connection with bills),
	That, for the purposes of any Act resulting from the Work and Families Bill, it is expedient to authorise
	(1) the payment out of money provided by Parliament of
	(a) any expenditure incurred by a Minister of the Crown or government department under the Act; and
	(b) any increase attributable to the Act in the sums payable under any other Act out of money so provided; and   (2) the payment into the Consolidated Fund of any increase attributable to the Act in the sums payable into that Fund under any other Act.[Tony Cunningham.]
	Question agreed to.

DELEGATED LEGISLATION

Agriculture

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation),
	That the draft Farm Woodland Premium Schemes (Amendment) (England) Scheme 2005, which was laid before this House on 2nd November, be approved. .[Tony Cunningham.]

Police

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation),
	That the draft Police and Criminal Evidence Act 1984 (Codes of Practice) Order 2005, which was laid before this House on 9th November, be approved.[Tony Cunningham.]
	Question agreed to.

EUROPEAN UNION DOCUMENTS

Motion made, and Question put forthwith, pursuant toStanding Order No. 119(9)(European Standing Committees),

Control of Avian Influenza

That this House takes note of European Union Document No. 8630/05 and Addendum I, draft Council Directive on Community measures for the control of avian influenza and draft Council Decision amending Council Decision 80/424/EEC on expenditure for the veterinary field; and supports the Government's objective of agreeing measures for the control and eradication of avian influenza.[Tony Cunningham.]
	Question agreed to.
	Motion made, and Question put forthwith, pursuant toStanding Order No. 119(9)(European Standing Committees),

European Evidence Warrant

That this House takes note of European Union Document No. 11288/05, draft Council Framework Decision on the European Evidence Warrant for obtaining objects, documents and data for use in proceedings in criminal matters; and supports the Government's position that the application of mutual recognition in this area will speedup and improve the transmission between Member States of evidence required to prosecute cross-border crime, whilst maintaining fundamental rights.[Tony Cunningham.]
	Question agreed to.

SECTION 5 OF THE EUROPEAN COMMUNITIES (AMENDMENT) ACT 1993

Ordered,
	That, for the purposes of their approval under section 5 of the European Communities (Amendment) Act 1993, the Government's assessment as set out in the Pre-Budget Report 2005 shall be treated as if it were an instrument subject to the provisions of Standing Order No. 118 (Standing Committees on Delegated Legislation).[Tony Cunningham.]

DELEGATED LEGISLATION

Ordered,
	That the Films (Exclusivity Agreements) (Revocation) Order 2005, (S.I., 2005, No. 3098), dated 1st November 2005, and the Forensic Science Service Trading Fund (Revocation) Order (S.I., 2005, No. 3138), dated 10th November 2005, be referred to Standing Committees on Delegated Legislation. [Tony Cunningham.]

CROSSRAIL BILL

Ordered,
	That Mr Brian Binley, Ms Katy Clark, Mr Phillip Hollobone, Kelvin Hopkins, Mrs Sian C. James, Mr Ian Liddell-Grainger, Mr Alan Meale, Dr John Pugh, Mrs. Linda Riordan and Sir Peter Soulsby be members of the Select Committee on the Crossrail Bill.[Rosemary McKenna, on behalf of the Committee of Selection.]

PUBLIC ACCOUNTS

Ordered,
	That Ms Diana R. Johnson be discharged from the Public Accounts Committee and Mr Austin Mitchell be added.[Rosemary McKenna, on behalf of the Committee of Selection.]

OFFICE OF THE DEPUTY PRIME MINISTER: HOUSING, PLANNING, LOCAL GOVERNMENT AND THE REGIONS

Ordered,
	That Mr Jim Cunningham be discharged from the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Committee and Lyn Brown be added.[Rosemary McKenna, on behalf of the Committee of Selection.]

HEALTH SERVICES (WEST CUMBRIA)

Motion made, and Question proposed, That this House do now adjourn.[Tony Cunningham.]

Jamie Reed: A preponderance of health-related issues and debates is raised at this time of year, and I am sure that that will be especially true if the forecasts of a harsh winter are even remotely accurate. The issues that I wish to raise are, sadly for west Cumbria, neither seasonal nor unusual, but endemic to the area. As one of the youngest Members in the House and as someone with the privilege of representing the constituency in which I was born and raised, I know that they have been a problem for 20 years. Stability in the west and north Cumbrian health economy is desperately needed, as two decades of uncertainty and anxiety have eroded the morale of staff and the confidence of patients throughout the area. That must change.
	West Cumbria consists of approximately 150,000 people who are dispersed in towns and villages covering a huge geographical area that is served by a poor road infrastructure. Car ownership is in the lowest bracket in the country, and public transport is woefully inadequate. As a result, urban towns and rural villages, although often technically close to one another are isolated by the difficulties associated with the communications infrastructure. As regards health services, west Cumbria is covered by the West Cumbria primary care trust, the North Cumbria acute hospitals NHS trust and mental health and ambulance trusts established in the same area. All those trusts recently informed the public that they must fundamentally examine the way in which services in west Cumbria are delivered.
	The PCT did so on 18 November, when it circulated to some staff, but not all, proposals for changing services in west Cumbria, including the closure of all beds in community hospitals in Millom, Keswick, Workington, Maryport and Cockermouth. The community hospital in Workington is brand new, and was opened by my hon. Friend the Member for Workington (Tony Cunningham) about a year ago following new investment of 12 million. The proposals were sent to staff in the PCT, and an accompanying press release was sent to the media. Neither my hon. Friend nor I was notified, and we still await official notification. In the absence of that basic courtesy, I have relied on members of the PCT who have sent me anonymous copies of the proposals, and the reporting of the local and regional media. That is a scandal, which I utterly condemn.
	Most importantly, given the difficulties posed by geography, the sparsity of population, low car ownership, poor public transport and an ageing population, the proposals to remove hospital beds from west Cumbrian communities were a disgrace. Moreover, they were made at a time when the NHS, both nationally and in north and west Cumbria, has received record levels of investment. It is not an exaggeration to say that our local health service has more money than it has ever had, and has received record injections of investment since 1997.
	To avoid accusations of politicking, in preparation for our debate my office asked the House of Commons Libraryan independent, non-partisan resourceto provide figures for investment in the West Cumbria PCT and its predecessor since the Government were elected in 1997. I was delighted to find that allocations for west Cumbria have increased by 96 per cent. over that periodeffectively, they have doubled.
	My hon. Friend the Member for Workington and I began working for the withdrawal of those proposals as soon as we learned about them, and in doing so brought the matter to the attention of Health Ministers, including the Secretary of State and the Under-Secretary of State for Health, my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Byrne), who is present tonight. There are a number of reasons why Health Ministers were as aghast as me. First, the proposals make no sense given the record funding since 1997.
	Secondly, the proposals do not reflect our manifesto pledge, which we made in May this year, to
	develop a new generation of modern NHS community hospitals . . . These state of the art centres will provide diagnostics, day surgery and outpatients facilities closer to where people live and work.
	Thirdly, the proposals are entirely contrary to the very precise thrust of health policy in this country. The forthcoming White Paper will outline the details in the spring, but let us be clear about the policy direction. The Secretary of State for Health recently told a meeting of the NHS Alliance that
	we need to focus on primary health and community serviceswhere 90 per cent. of people's contacts with the NHS take place.
	In a truly refreshing and insightful address, my right hon. Friend also told the same audience that from the consultation undertaken by the Department of Health, it is clear that people
	want more care and treatment closer to home, in community hospitals or health centresalthough we have to become much smarter at engaging people at an early stage in designing and considering options that involve fewer beds and other changes to acute hospitals alongside better services in the community.
	That point is particularly telling, because the PCT consultation in west Cumbria was also launched against the background of what is likely to lead to a new acute hospital for west Cumbria. Like any new hospital in the UK, it would be smaller in sizeI stress that services should not be diminishedwhich is right for the model of health care that is being progressed through not only national policy but, more importantly, through the advocacy of patients and health care professionals.
	In short, any new acute hospital in west Cumbriaor a comprehensive refurbishment of the existing hospital, for that matterwill rely on a network of fully functioning, fit-for-purpose community hospitals. Consequently, those proposals threatened not only the community hospitals themselves, but the delivery of a new acute hospital by a separate trusta quite incredible state of affairs. Will the Minister consider whether the community hospitals are in the wrong trust? Perhaps the acute hospital trust would be a better place from which to run community hospitals throughout west Cumbria, which is an idea that certainly makes sense to me.
	The acute hospital in west Cumbria, the West Cumberland hospital, which is in my constituency, is an issue to which I hope to return at a later date, but for now I inform the House and the Minister that any new hospital must be of an equal status to the other acute hospital maintained by the same health care trust in Carlisle, in order not only to achieve social justice in the provision of health services in west Cumbria, but to deliver equality of access and equal standards of health care throughout north and west Cumbria.

Peter Bone: Will the hon. Gentleman give way?

Jamie Reed: If the hon. Gentleman does not mind, I want to get on. If he has any telling or pressing points, we can discuss them outside the House or he can write to me.
	I urge the Minister and his Department to pay close attention over the coming months to this unfolding issue and, in particular, to the principles that I have outlined: equity of access and of standards. At this point, I ask the Minister to assess the funding formula for the NHS within the forthcoming White Paper and ensure that issues such as socio-economic factors and sparsity of population are addressed.
	Returning to the PCT, only this Friday I met clinical staff at Millom community hospital and the friends of Millom hospital to discuss the PCT's proposals. I expected anger, anxiety and dejection among those whom I was to meet, but I must extend to the Minister their sincere thanks and appreciation following his intervention. Like me and my hon. Friend the Member for Workington, the staff, friends and users of Millom hospital were delighted to learn about the Minister's intervention and are now hopeful for the future, given the plan that he has identified. The people of Keswick, Maryport, Cockermouth and Workington are also equally grateful.
	The Minister will correct me if I am wrong, but the plan states that West Cumbria PCT is in line for a record cash boost over the next two years totalling more than 30 million, which is nearly twice this year's underlying deficit. Local health chiefs must spend that money wisely following a much needed detailed debate and consultation on how to redesign services for the better. Over the next three months, the consultation in west Cumbria, which, as I understand it, will be undertaken by the strategic health authority rather than the PCT, will explain how the existing infrastructure of community facilities will be expanded. The Minister will visit west Cumbria in the new year to ensure that all of the above takes place.
	As a result, the PCT's proposals have, as I had hoped, been withdrawn. Let me assure the Minister that at no point did anyone believe that those proposals belonged to the Government. There is widespread acknowledgement of the fact that Labour is the only party with the interests of the NHS at heart. The Minister might be interested to learn that in my constituency at the last general election the Conservatives campaigned on a platform of reduced health spending and health service privatisation, and received their worst result for almost 100 years. The persistent and continual Conservative threat to the health services of west Cumbria rightly led to the Tories in Copeland receiving the lowest number of votes since the NHS was introduced. That damning condemnation of the Tories' health policy, and attitude, shows precisely how the people of Copeland and west Cumbria value their health services. I can put it no better than a farmer constituent who told me at the weekend that he would rather let a fox look after his chickens than let the Tories look after the NHS.
	Two groups are central to any consultation and redesign of services in west Cumbriapatients and staff. Patients are not slow in coming forward with their views. Civic engagement is evidently lacking in several policy areas, but health is not one of them. However, sufficient consideration needs to be given to the views, hopes, concerns and often wise and insightful suggestions of front-line service providers in west Cumbria. Having spoken to a good number of health care professionals from across a broad spectrum of services and professional standing, I know that all too often they do not feel that their knowledge and experience is valued, or even considered relevant, when management boards launch consultations. I urge the Minister to ensure that the new consultation in west Cumbria pays sufficient attention and proper regard to the views of health care professionals, who will after all deliver the model of care that is agreed on.
	West Cumbria PCT, against a background of record investment, is projecting a recurring deficit for next year of approximately 15 million. It is absolutely right that all trusts should be expected to balance their books. However, the fundamental question that lies at the heart of this debate is this: where has the money gone? I know that the Minister is as keen as me and my hon. Friend the Member for Workington to find the answer, and I hope that he can help us in that endeavour, particularly in the light of the effective doubling of investment since 1997. It is clear that the various trust boards serving west Cumbria are not working together. West Cumbria cannot sustain a viable health economy on that basis. I therefore ask for the Minister's help in achieving this for the benefit of all its health service staff and patients.
	One of the most pressing medical issues in west Cumbria is its lack of dentists. I appreciate that that does not fall within the Minister's brief and is the responsibility of the Minister of State, my hon. Friend the Member for Doncaster, Central (Ms Winterton), but it is entirely relevant to the scope of this debate. I was recently honoured to welcome the university of Central Lancashire to the Westlakes science park in my constituency, where the university has established a significant permanent presence. UCLan has an excellent academic and medical research record. On the strength of that, I approached the vice-chancellor and the dean of the Westlakes campus to discuss the possibility of the university's helping to expand dentistry provision throughout west Cumbria. I am pleased to say that it has, as part of a higher education consortium involving Lancaster university, the university of Liverpool and St. Martin's college, submitted a bid to the Department of Health, which if successful would see a dental school established in west Cumbria.
	This week, my hon. Friend the Member for Workington and I will write officially to the appropriate Minister to express our support for the bid and to outline precisely the direct and exponential benefits that such a development would have in west Cumbria with regard not only to dental provision but to the wider health service agenda. I hope that the Minister will urge hisdepartmental colleagues to give due detailed consideration to the bid.
	I thank the Minister for the close personal attention and effort that he has given to this issue. I look forward to meeting him in west Cumbria in the new year, when I hope that we can progress the agenda of improving the health services serving west Cumbria in a sustainable, effective and permanent manner, while serving the needs and aspirations of patients and staff.

Liam Byrne: I sincerely congratulate my hon. Friend the Member for Copeland (Mr. Reed) on securing this debate. He has not been in this House for long, but he has already established himself as a powerful advocate for his local community and as a voice on health issues in particular. It was in one of my first debates as a Front Bencher that I heard his contribution to the debate about dentistry. If he will forgive me, I will pass on the comments that he made this evening to the Minister of State, my hon. Friend the Member for Doncaster, Central (Ms Winterton).
	My hon. Friend has come to the House tonight to ensure that health care provision in his constituency is debated on the Floor. In congratulating him, I also congratulate my hon. Friend the Member for Workington (Tony Cunningham). His position on the Front Bench precludes his contributing to the debate, but he has contacted me on five or six occasions in the past week to give me counsel about how best to tackle the issue in his community. I should like to put on record my thanks to him for that. I also congratulate the Evening Mail and the Workington Times and Star on their excellent coverage of the debate. They have proved once again that they are a powerful voice for their local community.
	In reply to my hon. Friend the Member for Copeland, I want to elucidate three lines of debate. The first is about the future finances for health care in his constituency. The second deals with the sort of health care provision that we might expect for that money over the next few years. The third is the manner and method whereby decisions about the future of health care will be made.
	I should like to begin with a few words of thanks and praise for the front-line national health service staff in my hon. Friend's area who have seized the record investment and reform of the past few years to transform the health service locally. I was glad that he could celebrate their role so eloquently this evening.
	The transformation of the NHS in my hon. Friend's constituency has been remarkable. Our funding for the NHS has been at great and record levels in the past few years. From 34.7 billion in 1997, we have increased spending by nearly 70 billion in 200405. What does that mean for my hon. Friend? He partly answered that question himself. In this financial year, West Cumbria primary care trust will get 145 milliona real-terms increase of nearly 6 per cent. in the past year.
	If we compare such increases with those that we enjoyedif that is the right wordunder the previous Administration, we realise that, in their last five years, the average real-terms increase for the NHS was only 2.6 per cent. Indeed, in their entire 18 years in office, it was only 3 per cent.
	My hon. Friend asked where the increased funding has gone. I am glad to be able to provide some answers. More than 150 consultants have worked in Cumbria and Lancashire strategic health authority area, in which his constituency sits, since 1997. More than 3,000 nurses and more than 1,800 health care assistants now work there, thanks to the investment that we have made since 1997.
	With the extra staff come shorter waits. The number of people in Cumbria and Lancashire who wait more than six months for in-patient treatment has dropped by an extraordinary 90 per cent. since 1997. The number of people who wait 13 weeks for an out-patient appointment has dropped by more than 85 per cent. since 1998.
	With shorter waits come better drugs, which, with the extra staff, have delivered longer lives. The mortality rate in west Cumbria from coronary heart disease has fallen by around 29 per cent.an extraordinary fall. Cancer mortality rates are down by more than 9 per cent. since 1997. Good progress has been made but a great deal more remains to do. That is why extra investment is being routed to my hon. Friend's constituency.
	My first line of argument is therefore about the increased resources to my hon. Friend's constituency. Funding in his PCT has increased from 112 million to 145 million. It is set to rise again from 145 million to 188 million in 200708. My maths makes that an increase of approximately 43 million. The underlying deficit at the beginning of the year was around 17 million; the increase over the next two years is more than two and a half times the current deficit.
	I am glad that my hon. Friend mentioned the funding formula. He pointed out that it still contains a few imperfections in his constituency. He referred to socio-economic conditions and sparsity. It is right to review the formula again. I cannot promise answers in the forthcoming White Paper, but my right hon. Friend the Secretary of State for Health will introduce amendments in due course. Great investment has therefore been made.
	My second line of argument is about what the money should buy in my hon. Friend's constituency and that of my hon. Friend the Member for Workington. Here we can see an extraordinary choice for the NHS over the next couple of years, in regard to how to use the new money to build local health services that meet the needs of constituents in a sustainable way. I would say to my hon. Friend the Member for Copeland that 45 million will buy some quite interesting choices, including how much to invest in hospitals, local doctors' services and community hospitals, and how much to spend on public health. Such choices have not been enjoyed by many NHS staff for some years.
	My hon. Friend helpfully alluded to our manifesto commitment to deliver a new generation of community hospitals. We made a commitment to bring on line 50 new or refurbished hospitals over the next five years. These state-of-the-art centres will provide diagnostics, day surgery and out-patient facilities that are much closer to where people live and work. We made that commitment because we were aware of the great potential of community hospitals to enhance the delivery of health care for local people.
	The new community hospitals will help us to move care and diagnostic services out of acute hospitals. They will also make it easier to put together primary and social care services, and encourage GPs to provide more specialist services. Modern community hospitals will provide safe services for people much closer to where they live, which is central to our vision for the NHS.
	It is important, however, that these services should be provided in a sustainable way. My hon. Friend talked about the decades of uncertainty in his constituency; we must end that uncertainty. In May, the British people asked us to write a big cheque, but not a blank cheque, for the future of NHS reform. As we deliver care closer to people's homes and reduce the reliance on in-patient services, we must do so in a way that will stand us in good stead for the future.
	The primary care trusts are planning to consult on proposals for changing the shape of community services, with the aim of delivering services such as an improved community nursing infrastructure that is better able to support people at home and will therefore avoid the trauma and cost of inappropriate hospital admissions. We hope that that infrastructure will make it easier to discharge patients following a hospital stay. We also want the services to include therapy units to provide multi-disciplinary assessment and centre-based therapy. This is all about putting care much closer to people's homes. My hon. Friend mentioned the role of acute hospitals in the future, and I hope that that issue will be reflected on in the consultation.
	My third line of argument relates to the manner in which these decisions will be debated and, ultimately, made. In the months to come, the primary care trust will be seeking to understand how to take forward services in my hon. Friend's area. Its proposals will be judged against three simple criteria. First, are they safe, and will they improve patient care? Secondly, are they affordable in the short term, inside the envelope of the enlarged resources that we are making available? Thirdly, are they sustainable for the long term? I am pleased to say that the focus of the reshaped services will be on recycling community assets wherever practical.
	I would add that, while health organisations must determine the broad strategies and face the challenges of matching the extra resources that we are providing to the provision of local services, it is essential that, as they go about answering those questions, they do not overlook the perspective of local service users. It is therefore intended that any proposals for change in community services in Cumbria will go to public consultation in the new year.
	My hon. Friend alluded to the public listening exercises that we have undertaken as we have prepared the White Paper, Your Health, Your Care, Your Say. Members of the public have been asked what improvements they wish to see in community health and social care. In the new year we will present our plans for reforming the way in which local health organisations are accountable to their local communities for shaping services, so that, we hope, these debates will have a different texture and tone in future.
	Clearly, howeverthis is an important point for my hon. Friendsthe debate on the outcome of the Cumbria consultation will have to include an analysis against recommendations included in the White Paper.
	I know that my hon. Friend the Member for Copeland is concerned about emerging proposals in the public consultation. I am glad to be able to tell him that in order to review those options properly, and in the light of our ongoing work in the new health White Paper, the launch of the consultation has now been moved to late January or February of next year.
	It is unacceptable for my hon. Friend the Member for Copeland to have had so little involvement in the development of plans to date. It is not acceptable that he is briefed about plans only through friends and colleagues whom he might have in the primary care trust. I therefore assure him that there will be no fait accomplis, cabals or decisions made behind closed doors. The national health service is under statutory obligations in relation to the way that it runs consultation and its conversation with the public. I am therefore pleased that the director of corporate affairs at the strategic health authority, who is extremely experienced in consultation exercises, will support the primary care trust during the process over the coming weeks and months. I will take a watching brief on the development of the proposals, and I understand that before the document goes for public consultation it will be shared with my hon. Friends the Members for Copeland and for Workington. I plan to make a visit in the new year to see how the consultation is unfolding locally.
	I encourage my hon. Friends to continue to battle the corner for their constituents, and to engage with their local NHS on the way forward. Some decisions will need to be thought through carefully, but I am sure that my hon. Friend the Member for Copeland and his constituents will take the opportunity of the consultation exercise to make sure that their views and ambitions for the future are fully reflected in the blueprint that emerges.
	Question put and agreed to.
	Adjourned accordingly at twenty-six minutes past Ten o'clock.